Florida Hurricane Catastrophe Fund remains financially strong, which may be a benefit for homeowners
New estimates approved for the Florida Hurricane Catastrophe Fund show that it remains strong. The fund was established to help private insurance companies to help pay claims that they receive in the wake of a hurricane. The fund has been put to the test over the years and some have questioned its financially capabilities. Private insurers face significant risks in the Florida market due to the state’s exposure to natural disasters, but the fund remains financially reliable.
Fund has $13 billion in capital, with the ability to borrow an additional $8.3 billion if needed
According to the estimates, the Florida Hurricane Catastrophe Fund has approximately $13 billion available for insurers. The fund also has the ability to borrow as much as $8.3 billion in the case of a significant natural disaster. These funds exceed the amount of money that the program is required to hold by state law, making it a reliable financial windfall for insurance companies providing property coverage in the state.
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Insurance surcharges may be reduced for homeowners because of the financial capabilities of the catastrophe fund
This may be good news for homeowners throughout the state. The state can impose surcharges on homeowners insurance policies in order to ensure the solvency of the fund. If the fund has excess capital, these surcharges can either be reduced or removed entirely, providing homeowners insurance customers some financial relief. Earlier this year, the state announced plans to reduce these surcharges by a significant margin, with some homeowners being freed from the financial burden.
Insurance rates continue to rise throughout Florida
Florida has not been the victim of a major hurricane for several years. While this has been good for insurance companies, rates for homeowners insurance have continued to grow, especially for coverage that is provided through Citizens Property Insurance. Ongoing financial issues that are associated with natural disasters of the past are part of the reason homeowners insurance coverage continues to become more expensive in the state. These issues are not expected to be resolved for several years.