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Daily Real Estate News | September 2, 2004
Fla.: Hurricane Frances Could Force Premium Hikes
Florida residents should be prepared to pay higher home insurance premiums with Hurricane Frances approaching just weeks after Hurricane Charley cause widespread destruction, experts say.
Homeowners could even be required to fork over as much as 10 percent of their annual premium in a one-time special assessment if Hurricane Frances eats up the surplus currently held by the state's insurer of last resort, Citizens Property Insurance Corp.
However, experts do not expect Hurricane Frances to cause the $15.5 billion in industry losses experienced during Hurricane Andrew, which forced cash-strapped insurers to close their doors, leave the state, or boost premiums by more than 100 percent.
Since Hurricane Andrew in 1992, says Florida Office of Insurance Regulation spokesman Robert Lotane, insurers have beefed up loss reserves with the help of higher premiums. The insurer of last resort was established to provide insurance to residents unable to secure traditional coverage; and the Florida Hurricane Catastrophe Fund was created to minimize insurance risk.
Source: Miami Herald (09/02/04); Danner, Patrick
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