Floridians Pay Twice the National Average in Homeowners Insurance

Hurricane season will start tomorrow and while it’s been 11 years since Florida’s last major hurricane season, the tides could turn at any time. With Floridians already paying twice the national average in homeowners insurance, how would a destructive hurricane season affect your property insurance premiums? Does your household or business have a disaster preparedness in place? How will the coming hurricane season impact you?

Get Involved

To learn more about property insurance and its impact on Florida’s business community, make plans to attend the Florida Chamber of Commerce’s Insurance Summit on February 1-3, 2017, in Miami.

Florida’s Small Businesses Should Be Prepared for Hurricane Season

As Floridians, we all know and accept the reality that we live in a hurricane-prone state. Florida’s geographic location makes our state one of the most exposed places in the world to tropical windstorms and hurricanes. Of the 180 hurricanes that have made landfall in the continental United States since 1900, 65 have landed in Florida – the most of any state in the nation.

While it’s been nearly 10 years since the last major hurricane landfall, Florida businesses cannot rely on luck. Between 2004 and 2005, Hurricanes Charley, Dennis, Frances, Ivan, Jeanne and Wilma hit Florida and caused more than $70 billion in damages. In addition, Hurricane Andrew in 1992 caused $25 billion in damages to Florida – equating to more than double that in today’s dollars.

Why should small businesses be prepared?

When hurricane force storms hit our state, the impact to families and businesses can be devastating. Businesses face evacuation orders that require a shut down in operations, a temporary loss of their workforce and even damage to their headquarters that hinders production- sometime indefinitely. In order for businesses to continue their operations, Florida has a wealth of resources- especially for small businesses that may not have the capacity to deal with an extended shut down.

Take for example, AppRiver’s Digital Disaster Preparedness Program, a service designed to protect and preserve email traffic. The cloud-based service averts email downtime by redirecting an organization’s email to one of AppRiver`s secure data centers in the event of a natural catastrophe. Once the danger passes and connectivity is restored, AppRiver will forward all outage-period email back to the company`s server, free of charge.

“This service was designed to protect business email during an outage and help companies get up and running again as quickly as possible,” said Michael Murdoch, CEO of AppRiver. “Email is critical and a business shouldn’t have to lose important messages even in the midst a natural disaster.”

For small businesses that require a more serious need, the state of Florida offers an Emergency Bridge Loan Program, activated by the Governor in the event of a disaster. The Small Business Administration also offers low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters to replace or restore items in the event of a declared disaster.

The Florida Chamber encourages your businesses to come up with work continuity plans in the case of a natural emergency. FloridaDisaster.org has resources that can help small businesses. For more information on how the Florida Chamber is advocating for small businesses, please contact Carolyn Johnson at cjohnson@flchamber.com.

Just in Time for Hurricane Season: Property Insurance Catastrophe Fund is in Good Fiscal Condition

Good news just in time for the 2015 hurricane season. For the first time since its 1993 creation, the Florida Hurricane Catastrophe Fund (CAT Fund) has enough liquidity to cover the $17 billion statutory coverage, according to state data released last week.  Claims-paying estimates provided to the CAT Fund Advisory Council show the program will have $12.8 billion in cash on hand at the end of 2015. Two years ago, the CAT Fund began transferring risk and now has $4.2 billion in pre-event bonds and private reinsurance – providing the $17 billion capacity to pay claims for the 2015 hurricane season.

The Florida Chamber of Commerce has long-supported transferring risk to the private reinsurance market to aid in the fiscal health of the CAT Fund. However, there’s more work to be done. While the CAT Fund is now in a better position to protect insurers from their initial season of losses, the CAT Fund could still experience trouble if a second season of storms occurs, according to the data.

The claims-paying estimate data released last week also examined the CAT Fund’s capacity for a second season of storms.  The report assumes that the CAT Fund would not use the pre-event bonding in the first season, and instead would turn to the market for bonds – leaving the pre-event bonding to finance a second season of storms.

The estimated bonding capacity of the CAT Fund is $7.7 billion, which is down $600 million from the October 2014 estimate.  This would allow the CAT Fund to pay only 69 percent of its obligation for the second season, leaving roughly $5 billion in losses uncovered. Post-issued bonds will be paid back through assessments, or “hurricane taxes,” by all property and casualty policyholders, including automobile insurance.  Additionally, insurers may experience trouble during a second season of storms due to the lack of capacity for the CAT Fund to pay claims in this season.

To make Florida more competitive, the Florida Chamber has long-supported reducing the size of the CAT Fund – allowing insurers to plan for more than one season of storms. Share your voice. Contact Carolyn Johnson at cjohnson@flchamber.com to learn how you can help.