State Hurricane Insurance Proposed
Posted: 7:24 PM Mar 25, 2009
Last Updated: 7:24 PM Mar 25, 2009
Reporter: Whitney Ray
Email Address: email@example.com
Florida is just one major storm away from bankruptcy. The state’s catastrophe fund is inadequate and Washington is hesitant to offer a backup plan. Senator Mike Fasano is pushing legislation to create state hurricane insurance. Fasano says the plan could reduce rates.
“We have to create a windstorm pool to put all the homeowners and properties that want windstorm into one pool statewide thereby spreading the risk out and reducing premiums,” said Fasano.
Private insurance companies are seeking double digit rate hikes to prepare for a major storm, but the state has the most exposure. The state already takes on the riskiest properties through Citizens, leaving private insurance companies to cherry pick from the safer homes. Governor Charlie Crist wants to keep Citizens intact.
“From what I understand it talks about getting rid of Citizens Property Insurance Company and I couldn’t support that that has been a lifesaver for Florida,” said Crist.
Florida’s Chief Financial Officer Alex Sink said the plan stinks.
“It’s a terrible idea,” said Sink. “Let me draw a picture; If we have a one in a hundred year storm, which we very well could have, that’s 60 billion dollars in residential hurricane losses in our state.”
But the Cat Fund offers 20 billion dollars in protection, but its unclear if the state could bond for the extra amount. The sponsors of the legislation in the House and the Senate say their plan would lower insurance cost for everyone by enticing more insurance companies to write policies in Florida.