The chief operating officer of the hurricane fund in Florida, Jack Nicholson, has expressed serious concerns about the fund’s ability to assist insurance companies in paying for claims that have been made following major storms.
Florida has been using the hurricane fund for almost two decades, since the time when the southern part of the state was devastated by Hurricane Andrew. Money from the fund is provided to insurance companies in order to assist them in paying off claims made by homeowners in the event of a hurricane – or a number of hurricanes – that have brought about widespread destruction.
Nicholson has informed legislators that the hurricane fund is currently on “shaky ground”. He explained that the continuing struggles in the global financial marketplace is increasing concerns as to whether or not it would be possible to borrow sufficient money to assist insurance companies in the event of another hurricane.
The fund has already provided approximately $18.5 billion in coverage this year, and though it still has over $7 billion available in ready funds, to complete the year, it would still require an additional $11 billion.
Nicholson expressed that “I think we are dangerously overexposed considering the current reality of the marketplace,” and added that “It scares me to death where we are.”
He has shared this information with the lawmakers in the state in order to encourage them to reduce the size of the Florida Hurricane Catastrophe Fund. This move is backed by Governor Rick Scott, as well as a number of other key republicans, despite the fact that it will probably cause insurance premiums to rise.