People across Florida are likely well aware that June 1 marks the beginning of hurricane season, and that's just right around the corner. Property insurance -- including home, auto and other types -- should also be at the top of mind for residents.
Hurricanes can do untold amounts of damage, but because it's been nearly a decade since the last hurricane, people may not be as vigilant about their preparedness and insurance coverage as they have been in previous years. Thankfully, recent news suggests that the state is prepared for a catastrophic hurricane.
Since Hurricane Andrew, the state has provided coverage funds to insurance companies in order to ensure that the companies are capable of covering all the damage suffered by policyholders.
Prior to the development of this fund, insurance companies couldn't cover the full extent of catastrophic damages alone and were motivated to actually leave the state to avoid having to pay off claims in an environment susceptible to hurricanes. The Florida Hurricane Catastrophe Fund was created to provide relief to insurance companies and their clients.
It took more than 20 years after the creation of the fund to reach an important milestone. Recent reports indicate that due to the lack of hurricanes in recent years, the money available through the state fund is now officially enough to cover the maximum amount of damage in a hurricane without having to borrow more money.
This should come as some relief to Florida residents who are wary about their insurance company's inadequate reinsurance and surplus resources, which has been a very big problem in the past. Insurance companies that fail to have the resources necessary to cover all their policyholders may be more motivated to try and deny claims or delay payouts not because of the claim itself but because it is ill-equipped to handle the financial demands of the situation. Ultimately, this can be devastating for individuals and communities across the state.
The fact that the Florida Hurricane Catastrophe Fund is now flush with $17 billion is certainly reassuring. However, those who have questions or concerns about their insurance company and coverage policies would still be wise to discuss their issues with an attorney in the event of a dispute or in attempt to avoid a future dispute.
Source: Miami Herald, "Florida's hurricane insurance fund strong for storm season," Gary Fineout, May 13, 2015