Homeowners insurance crisis: Could reform of Hurricane Catastrophe Fund save Floridians $150 a year?

Homeowners insurance crisis: Could reform of Hurricane Catastrophe Fund save Floridians $150 a year?

Article Courtesy of Channel 8 On Your Side

By Mahsa Saeidi

Published April 23, 2022

TAMPA — Florida lawmakers will head back to the capitol next month to address the state’s property insurance crisis, and insurance experts say one proposal could immediately save homeowners, on average, $150 per year.

The short-term solution involves making insurance cheaper for insurance companies.

Soaring insurance premiums have left Florida homeowners stunned. Industry experts say the crisis is caused by out-of-control litigation but, to date, lawmakers have not stopped the abusive lawsuits.

At a Senate committee meeting three months ago, State Sen. Jeff Brandes, R-St. Petersburg, floated a different idea to lower rates.

“The amendment allows companies to buy in at a lower level,” Brandes explained.

Sen. Brandes wants to change the Florida Hurricane Catastrophe Fund – the CAT fund. The CAT fund sells insurance to every property insurer in the state. Insurance companies must have insurance too.

Sen. Brandes wants to temporarily lower the contributions companies and consumers make.

“It will save the companies and ultimately it will save consumers about $150 a year,” said Sen. Brandes.

Created in 1993 after Hurricane Andrew, the CAT fund pays claims after major disasters.

“Since 1993 to today… has paid out roughly $15 billion but it still has in the account $15 billion of capacity today,” Sen. Brandes explained.
Tampa Bay has dodged Florida’s catastrophic hurricanes, but for how much longer?

Gina Wilson, the chief operating officer of the Florida Hurricane Catastrophe Fund, warned in January that freezing contributions is risky.

“Those that don’t remember the past are destined to repeat it. The CAT fund ran out of money in 2006,” said Wilson. “We’re very fortunate because we had 10 years with no storms, that’s the only reason we have money in the bank.”

Sen. Brandes is not the only one supporting this idea. From the insurance companies to consumer advocates, they all tell 8 On Your Side Investigative Reporter Mahsa Saeidi, this is a short term solution that needs to happen now.