As a blogger for Insurance School Florida, it’s good to see that the Florida Hurricane Catastrophic Fund is at well-funded levels. There is enough enough money and bonding ability to pay off Twenty-Five Billion Dollars in losses .
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The Catastrophic Fund has 17 billion dollars ready to go without the need for additional bonding. Of that 17 , seven Billion is from insurers. In the event of a hurricane the first 7 Billion in losses would Fall at the insurer’s feet insurers. That is called “industry retention.” If an insurer is is hit particularly hard they are eligible to get help from the Catastrophic Fund.
In addition to the retention , insurers pay a detuctible or co-pay for their Cat Fund coverage. The favorite plan is Ninety percent coverage and 10 % taken in losses by the insurer.
The Cat Fund does not cover commercial real estate. It covers residential.
Florida is overdue for a hurricane now . Here are some statistics :
And the odds of having a damage are increased by having multiple hurricanes hit in 1 season like it did back in 2004 and 2005.
After the 2005 hurricane season, many were concerned that there would be no insurance policies readily available in Florida’s future . But the Industry and government have worked it out so that a Hurricane doesn’t spell financial disaster.
Rick Sabian