FLORIDA CFO WARNS OF HURRICANE PREPAREDNESS:

With explosive state population growth and experts predicting the formation of more than 12 named Atlantic storms, Florida’s Chief Financial Officer Tom Gallagher issued a warning recently to Floridians to prepare. The hurricane season officially started June 1. The National Weather Service has predicted that 12-15 tropical storms will form this year, with 6-8 becoming hurricanes and 2-4 becoming major windstorms. Gallagher advised Floridians to take steps to secure their homes and develop an escape plan. Gallagher also alerted Floridians to a new law, recently signed by the governor, designed to increase the availability of homeowners insurance and improve Florida’s ability to recover financially from catastrophic hurricanes. The legislation makes improvements to Florida’s Hurricane Catastrophe (Cat) Fund, a fund created after Hurricane Andrew to ensure that Florida’s insurance companies could quickly pay homeowners claims after a major hurricane and continue to provide coverage. The Cat Fund’s capacity will expand from $11 billion to $15 billion in time for the 2004 hurricane season. The Cat Fund currently provides $11 billion of capacity, or reinsurance, which is insurance for insurance companies. The lack of reinsurance available through the private market, coupled with the inability of the Cat Fund to grow with the market, has reportedly resulted in a number of consumers being dropped by their insurance companies and forced into Citizens Property Insurance Corporation, the state’s insurer of last resort. According to Gallagher, several insurance carriers have committed to writing more coverage this hurricane season due to the new legislation, which went into effect on June 1, 2004.

Topics Florida Catastrophe Natural Disasters Legislation Hurricane A.J. Gallagher