News & Updates


Commentary: Even without a storm, nonprofits are hit hard

Barney Bishop and Ted Granger

Mother Nature’s present to Florida for the holidays — a hurricane-free storm season. Once again, we managed to escape a destructive hurricane season and the devastation that would have been left by debris, wreckage and the hurricane taxes that would have been added to our policies.

However, as we approach the 2010 state legislative session, we are in fact facing the same predicament as we were last year.

We continue to have growing concerns over the financial stability of the Florida Hurricane Catastrophe Fund (Cat Fund). Recent reports indicate the Cat Fund must issue up to $450 million in bonds to raise additional money for reimbursements from the 2004 and 2005 hurricane seasons.

It is unfortunate that Florida businesses and nonprofits, which do not receive any benefit from the Cat Fund, are being taxed to cover insurance discounts for Florida’s coastal residents. At a time when our businesses are struggling due to the economy, these taxes limit business profits and growth.

Additionally, with charitable donations down, having to pay additional taxes ultimately takes money away from our core function of helping those in need.

While this latest news is of great concern, we are also troubled with the hurricane taxes that loom in the event a major hurricane hits the state. During the 2009 state legislative session, our elected leaders crafted HB 1495 as a reasonable legislative solution to the insurance crisis. In late May, the bill, which was signed into law, was seen as an important first step to stabilizing Florida’s property insurance market. While this bill is not the complete answer to our state’s insurance crisis, the Florida Legislature has started to address what seem like errors of the past, as the legislation lessens Florida’s financial risk and in turn lessens the chance that our businesses and nonprofit organizations will be hit with additional hurricane taxes in the future.

Since the Cat Fund does not collect enough premiums in advance, it relies upon post-event borrowing paid off by hurricane taxes — or assessments — on every home, business and automobile policy after a storm hits our state. These assessments could amount to thousands of dollars per year, every year for 30 years, all to support the Cat Fund.

From home and business owners to nonprofit organizations and car owners, we need to limit or at least eliminate assessments on those who do not benefit from the Cat Fund in order to protect the people of this great state.

Last year, we worked together to support the Legislature, and we plan to once again join forces during the 2010 legislative session to encourage our elected leaders to take the additional steps to stabilize the property insurance market in Florida on the path to fiscal responsibility. Not only is it is our hope that the amount of possible assessments be reduced as quickly as possible, but also that there is a reduction in the likelihood of additional assessments being triggered at all.

We realize the urgency of acting before the storm, and we hope that our elected officials will continue last year’s work in order to protect Floridians across the state from having to face enormous financial risk and the potential bankruptcy of the state.

On behalf of Associated Industries of Florida and the United Way of Florida, we say it is imperative that Florida’s legislators work next year to assist Citizens Property Insurance Corp., in returning to its core mission of providing insurance to a smaller group of Floridians who truly cannot find coverage. Additionally, we urge our elected officials to return the Cat Fund to its original mission of providing stability for huge, Hurricane Andrew-sized events, rather than asking businesses and nonprofits to subsidize coverage for more frequent events.

These changes are imperative to protecting businesses, including nonprofits, and ensuring that our scarce resources can continue to be devoted to improving our communities and helping those Floridians who need our programs most.

Additional Facts


  • Barney Bishop III is president of Associated Industries of Florida. Contact him at Ted Granger is president of United Way of Florida. Contact him at