A combination of market forces and higher costs has caused a dramatic reduction in the size and exposure of the Florida Hurricane Catastrophe Fund (Cat Fund) for this storm season.
Lawmakers greatly expanded the size of the Cat Fund in 2007 as part of an effort to bring down the cost of reinsurance, and by extension, the cost of homeowners' insurance premiums. The growth spurt prompted worries that Florida was overextending itself and putting either the state or rate payers on the hook if large hurricanes hit.
Last year legislators took a series of steps to scale back the size of the Cat Fund — and increase its costs — as a way to gradually reduce the state's exposure in the next several years.
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