Report Warns of Property Crisis

According to Florida TaxWatch, our state may be "one major hurricane hit away from depending upon Federal relief or facing financial crisis."
Citing problems in Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund, an analysis released today by the Florida Council for Economic Advisors at Florida TaxWatch proclaims that we face a property insurance crisis.
According to the report, the Florida Hurricane Catastrophe Fund's "estimated payment capacity for 2009-10 is $16 billion, to be funded with $8 billion of liquid resources and $8 billion of estimated post-event bonding. The estimated potential deficit is $7.2 billion."

Additionally, the actuarially unsound Citizens remains Florida's largest residential property insurer.
Although the report focused on an assessment of the financial exposure that Citizens and the Cat Fund pose to the state — and not on possible solutions — the authors nonetheless said they concurred with recent recommendations from the Citizens Mission Review Task Force and the Florida Chamber of Commerce/The Florida Council of 100. The report said that those recommendations included: 1. Requiring Citizens to serve as Florida's insurer of last resort and for its rates to be actuarially sound 2. Raising awareness of potential assessments by requiring Citizens and the Cat Fund each year to publish estimated assessments for a 1-in-100-year storm 3. Supporting programs that encourage homeowners to strengthen their homes to better withstand high winds, thus lowering the potential for storm damage claims 4. Prohibiting Citizens from insuring new structures in high-risk coastal areas
The full TaxWatch report, "Self-Insurance" Programs: The Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund," is available at www.floridataxwatch.org.