A Florida House-Senate budget panel has added the state’s risk of incurring billions of dollars in possible hurricane insurance losses to Florida’s long-range financial outlook.
The new changes could dwarf potential budget deficits that the outlook anticipates in each of the next three fiscal years.
The joint Legislative Budget Commission agreed to add the insurance statement offered by Senate Ways and Means Chairman JD Alexander. It says the available liquidity and bonding potential in the Florida Hurricane Catastrophe Fund, which provides backup coverage to insurance companies, is about $7 billion short of meeting the fund’s maximum legal obligation this year.
Also, state-created Citizens Property Insurance Corp. would come up another $7 billion short of paying an estimated $23 billion in losses should Florida get hit by storm so strong that it could be expected only once every 100 years.
Those financial gaps could be filled through borrowing and assessments against insurance customers. That “may expose the state to much greater potential financial liability for hurricane-related costs,” the outlook statement says.
Some lawmakers were worried the statement might harm Florida’s bond rating, but it passed 9-1.
Topics Catastrophe Natural Disasters Florida Profit Loss Hurricane
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