Florida is a particularly difficult state when it comes to property insurance. The risk and damage from hurricanes plays a large role in that. Property owners rely on the state to ensure that they are covered and can rebuild after a catastrophic hurricane, but that reliance is looking shakier these days, as Florida deals with budget shortfalls and diminishing resources.
The Insurance Journal noted this week that Florida’s Hurricane Catastrophe fund has $8.5 billion in cash reserves and can raise another $7 billion through bonds, totaling $15.5 billion in resources. That may sound like a lot of money, but in reality it isn’t nearly enough to cover the fund’s obligations. The fund is statutorily on the hook for $17.5 billion for a single major storm, and $11 billion further for a second storm. The fund does not currently have enough money to cover even the first storm, let alone the second.
The fund’s executive director is hoping the state government will consider restructuring it so it can have a longer term capacity. Part of that potential restructuring is lowering the mandatory annual capacity, but that could harm Florida property owner’s ability to rebuild after a disaster. Insurance rates would rise significantly, and those rates are already unmanageably high for some in our state. An option to stem these rate hikes is to not allow them to be part of insurance agents’ commissions. But agents oppose the idea and say it would penalize them. Agents already get less in commissions because of increased mitigation credits to property owners, so they claim they are “the last guy in line getting stuck with the bill.” Another idea is to allow the fund to issue bonds before a big storm to have more cash and be able to move quicker to help Floridians.
One member of Florida’s Congressional delegation, Representative Dennis Ross, has proposed Homeowners Insurance Protection Act. This would create a federal program to help states in major catastrophic natural disasters, which would include not only hurricanes but also, for example, earthquakes in California. Opponents of this proposal say it would allow states, like Florida, to shirk its obligations and continue underfunding its own programs. It could also potentially promote even more reckless building in very high risk coastal areas.
With Florida’s complicated property insurance laws and regulations, a Florida insurance attorney can assist you in an insurance claim action. We understand how important it is for you to receive the benefits agreed upon, promised, and paid for, and can help you understand your case and potential legal options. Contact our law office at (561) 867-6010 to discuss your case today. Under Florida law, if you succeed in your case, the attorney’s fees will automatically be the responsibility of the insurance company. This means that no matter how big or small your claim, if you win your case, you get to keep the entire award and the insurance company will pay all of your attorney’s fees.
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