Cat Fund celebrates 25th birthday
May 21, 2018
The Florida Hurricane Catastrophe Fund turns 25 this year. The Legislature created the official reinsurance pool after Hurricane Andrew caused more than $10 billion in residential losses — vastly more than was thought possible.
Insurers had collected a mere $1 billion in premiums that year.
The storm bankrupted at least 10 insurance companies. Those that survived threatened massive policy nonrenewals, cancellations or to abandon Florida altogether. Large, national insurers did mostly take their leave.
By 2006, a state task force concluded that the fund had served as the “cornerstone for market recovery and catalyst for attracting new companies and additional new companies to Florida.”
Additional innovations included the creation of Citizens Property Insurance Corp. to serve the residual storm insurance market, and encouragement of Florida-based insurers to serve the market.
Meanwhile, newcomers continue to pour into vulnerable regions. A seven-county coastal swath extending from Palm Beach to Charlotte counties realized 55 percent population growth between 1990 and 207 — adding 2.6 million people.