The Florida Legislature is considering a bill that would establish an annual hurricane deductible for insurers and lower the threshold of losses that an insurer must sustain before recovering monies from the Florida Hurricane Catastrophe Fund.

Such an action would help keep residential property insurance both available and more affordable for consumers, according to the Property Casualty Insurers Association of America. “Florida must act on the lessons learned last season and properly prepare for the 2005 hurricane season and beyond,” said William Stander, a regional manager for PCI. “The changes that PCI supports will strengthen the cat fund, enable insurers greater access to the fund during a multiple-event season such as 2004, and better assure that future hurricane losses do not imperil any property insurer's financial stability.”

The availability of additional cat fund resources is crucial to preserving a healthy and competitive insurance marketplace, which is essential for attracting and retaining property insurance writers, according to PCI. The fund serves as an important financial backstop for the insurance marketplace and makes it possible for individual insurance companies to write residential property insurance in a hurricane-prone state such as Florida. “These changes also will help reduce pressure on the state-run insurance company, Citizens Property Insurance Corp., which failed to recover even one dime from the cat fund and now is $400 million in the red,” said Stander.