Florida’s Citizens Has Sweet Plan to Cover Hurricane Losses

Florida’s largest property insurer, the state-backed Citizens Property Insurance Corp., which is always looking for ways to shore up its reserves, thinks it has a new winning plan.

Citiizens has more than $5 billion in surplus, however, if a major storm were to hit, losses could be four times that amount and Citizens policyholders and taxpayers would have to be assessed to pay losses.

Citizens officials told Gov. Rick Scott and members of the Florida Cabinet last week that they are planning a series of bake sales featuring home baked muffins, pies, cookies and cakes. The tasty treats will be made by Citizens staff and volunteers from the fraud bureau. Citizens executives said they believe they can raise about $100 million selling baked goods, even though by law Citizens has to charge less than other bake sales.

This is not the first time Citizens has tried to raise money. In 2009, the insurer sold raffle tickets for free house demolitions for hurricane victims.

CFO Jeff Atwater criticized the latest plan as a “half-baked idea” but Hammond Daigs, executive chef at Citizens, defended the plan. “If it’s good enough for the girls’ lacrosse team, it’s good enough for us,” said Daigs.

Daigs may wish he had never put it that way because as soon as they heard about it, youth sports teams up and down the coast said they are filing suit against the insurer for anticompetitive practices.

Gov. Scott urged Citizens to consider bagels instead of muffins.

Topics Catastrophe Natural Disasters Florida Profit Loss Hurricane