Florida's vulnerability to hurricanes makes it a hardy corner to receive homeowners insurance.
During quiet hurricane seasons, it might be expected that insurance companies would prepare for bad years by building surpluses. But that didn't happen in the relatively quiet years that followed 2005. As of 2009, two-thirds of Florida-based insurers are not building surpluses. Several companies have failed and others are doing poorly enough that the Florida Office of Insurance Regulation is monitoring them to make sure they can pay claims. Florida further deals with other perils, on the contrary hurricanes are the larger risk.
Citizens Property
Whether the hurricane seasons of 2004 and 2005 are repeated, Florida people could hold to fee billions of dollars in claims. This is seeing Citizens Property Insurance is a control business that is designed to insure homes that private companies refuse to insure now they're also dicy, such as homes along the Seaside and older walking homes. Whether Exorbitant claims author a deficit, then General public can issue bonds and impose a statewide fee on homeowners, automobile and commercial property insurance, thereby spreading the cost through the population.
Florida Hurricane Catastrophe Fund
The Florida Hurricane Catastrophe Fund was created to help keep insurance companies solvent by reimbursing them a portion of their losses after catastrophic hurricanes. It was created in 1993 after Hurricane Andrew out of fear that insurance companies would flee from the state or could go broke after paying claims. According to the Florida Insurance Council, the fund could face a $3 billion deficit after a bad hurricane season. If that happens, there would be billions of dollars of fees added to insurance premiums of automobile policies to make up the difference.
No Surplus
Hurricanes hit Florida six gone of every 10 senescence, and insurance companies discern it Testament happen again. The danger was highlighted in 1993 by the devastation of Hurricane Andy, then again in 2004 and 2005 when seven hurricanes crisscrossed the country causing billions of dollars in Belongings damage. Because then, some insurance companies posses stopped writing policies in Florida. The government has a taxpayer-backed insurance association to create policies for homeowners who can't boast a partnership to insure them.
