South Florida Homeowners Insurance Carriers

Fla. hurricane fund chief warns state in danger

The state has relied on a hurricane fund ever since Hurricane Andrew devastated South Florida nearly 20 years ago. Insurers get help to pay homeowners if a hurricane - or a series of hurricanes - results in widespread damages.

But Jack Nicholson, the chief operating officer of the fund, told state legislators on Wednesday that the fund is on "shaky ground." He said ongoing turmoil in the world financial markets is raising questions about whether the fund could borrow enough money to help insurers after a hurricane.

This year the fund is providing $18.5 billion worth of coverage, and while it has more than $7 billion worth of cash on hand, it would still need to borrow another $11 billion.

"I think we are dangerously overexposed considering the current reality of the marketplace," Nicholson said. "... It scares me to death where we are."

Nicholson used the warnings as part of a pitch to state lawmakers to scale back the size of the Florida Hurricane Catastrophe Fund. That would likely cause insurance premiums to rise but it has the backing of many key Republicans, including Gov. Rick Scott.

Every insurer currently in Florida is required to purchase coverage from the "Cat Fund" as it also called. The fund provides a backstop to insurers at a rate that is generally cheaper than reinsurance sold by private companies. Nicholson estimated that this low-cost option probably results in insurance premiums being about 25 percent cheaper.

If a storm causes enough damages the insurer can ask for reimbursements from the fund. But if the hurricane fund runs out of cash due to a large storm, it borrows money to pay insurers.

The state pays off its debts with an assessment, or what some call a "hurricane tax," that is placed on nearly every insurance policy in the state, including auto insurance policies. Right now, homeowners and drivers in Floria are paying off charges due primarily to Hurricane Wilma.

When can your insurer drop your Parkland or South Florida home ...

When can your insurer drop your Parkland or South Florida home policy?

After Hurricane Wilma, many Parkland and South Florida homeowners were dropped by their insurance companies.  Homeowner’s insurance is a major factor when purchasing a home.  As a result, it is important to know your rights. It’s imperative for Parkland and South Florida homebuyers to understand all of their options when purchasing homeowners insurance.  As a result, we will continue to update the Parkland public with changes in policies and other related homeowner’s insurance issues.

Know These Facts: Your insurance company cannot drop your policy just because you filed a single water damage claim or a claim resulting from a hurricane or major storm.  An insurance company can only cancel if the policyholder neglected to take actions that the insurer requested to prevent similar damage from occurring again. Your insurance can also be canceled when it is up for renewal or within the 90 days after the policy takes affect.

Your homeowner’s insurance can also be canceled after 90 days if:

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