Even Higher Homeowners Insurance Premiums Predicted

Just when everyone was resigning themselves to increases they are facing in their homeowner's insurance policies caused by Citizens Insurance, another problem has surfaced that could mean even higher premiums for all of us. State officials are now saying that the Florida Hurricane Catastrophe Fund is nearly tapped out, after two back to back hurricane seasons, which could mean even higher premiums for homeowners this year. The Florida Hurricane Catastrophe Fund offers discounted re-insurance, that is, insurance to insurance companies, to help them pay for claims. This fund was created in November 1993 after Hurricane Andrew, by our Florida Legislature, and its purpose is to protect the solvency of insurance companies in the event of catastrophic hurricanes. All insurance companies writing homeowners policies in this state are required to pay an annual reimbursement premium to the Florida Hurricane Catastrophe Fund. Before you breath a sigh of relief thinking that the insurance companies will have to pay into this fund, stop and ask yourself where the insurance companies get their money. From us, of course, through a line item on our homeowners premiums invoice. Right now an average of 12% homeowner premiums go to pay into this catastrophe fund, but that fund is expected to rise this year from another 1% to 3%. These increases are being requested by Florida Insurance Commission to rebuild this fund before the 2006 hurricane system. In the event the catastrophic fund managers recommend charging insurers even more this year to build up reserves faster, bonds would be necessary to cover the costs. If bonding becomes necessary, the fund would then levy assessments across all lines of insurance, except medical malpractice and workers compensation. The State Board of Administration, which consists of Governor Jeb Bush, Charlie Crist and Tom Gallagher, would have to approve either a rapid cash build up for the fund through higher premiums, or an emergency assessment on our insurance policies. Governor Bush previously pledged that his 2006 agenda would include an aggressive approach to correct the problems within our state for homeowners insurance. Governor Bush, we are depending on you, and the Florida Legislature, to look critically at this issue for the sake of all homeowners in this state.