And what about tsunamis, earthquakes and drought? No state is immune from natural disasters. If multiple states pooled their catastrophic risk, they would achieve an economy of scale and risk diversity that would effectively lower their cost of reinsurance in a way states cannot achieve on their own. 

Here in Florida, we struggle with the availability and affordability of Homeowners' insurance—something our friends along the Gulf and Atlantic coasts are already beginning to know too well. States that pool resources under a national cat-fund model would, in essence, provide a backstop for private insurers in their state. That, in turn, would make the private market more stable, heat up competition among insurers for non-catastrophic perils, and help prevent company insolvencies and marketplace disruption in the future. 

Many scientists believe climate change will increase the number and severity of natural disasters in North America. There's no way to know with absolute certainty if that's the case, but worldwide insurance-risk experts such as Munich Re and others are factoring climate change into their risk models. Indeed, the insurance industry is betting on larger and more costly catastrophes in the future and is managing business accordingly. Will our nation be proactive, or will we continue to deal with the predictable consequences in an unsustainable way? 

Spreading risk is a proven economic principle that makes insurance more affordable and plentiful. While the definition of what constitutes a natural disaster is somewhat controversial, there is no question that some natural disasters will exceed the financial capacity of state funds. Only a program that is national in scope can generate enough capacity to cover the most costly disasters. A national cat fund is long overdue—and Congress should act now to put it into place.