Rand on 9/11 Compensation

The Rand Corp has just come out with a study of who-paid-what for 9/11.  This chart is quite interesting from the point of view of public policy.  The government picked-up a great deal of the losses, but the insurance industry paid 51% of the total losses, charity picked up 7 percent and the government picked up the remainder.  Ideally, one would like the private market to pick up even more and public policy should be designed to encourage people to have more insurance rather than rely upon prospective government payments.  The victim compensation fund was a pure handout and should be really be called the victim compassion fund.  If we have more of these events, will we suffer from compensation burnout and will the government really be able to afford these types of pay-outs for all injured victims?  Further, if people understand that there will likely be a "compassion fund", they may have an incentive to reduce insurance purchases.