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Florida Could Face $1.5 Billion Shortfall If Major Hurricane Strikes

Oct 08, 2012 | WMFE - Florida still may not have enough money to pay off hurricane insurance claims if a big storm hits, according to a new report.

New estimates drawn up for a state advisory panel conclude that Florida could fall $1.5 billion short of what's needed to cover its obligations. The panel is meeting to review and approve the estimates Tuesday.

Florida created a backstop for insurers after Hurricane Andrew slammed into the state nearly 20 years ago. However, the fund has to borrow money if claims exceed its cash reserves.

The new estimates conclude the state could likely borrow up to $7 billion after a hurricane. The $7 billion would be paid back with a surcharge placed on property and auto insurance policies.

 

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