Florida TaxWatch: State's Hurricane Insurance is Underfunded, Overexposed

A Florida TaxWatch report says the state's hurricane insurance system is underfunded and overexposed, and needs reform to protect Floridians.

The current insurance system puts taxpayers on the hook for potentially billions in assessments, while providing little assurance that their claims will be paid in the event of a catastrophic hurricane or series of hurricanes, said Dominic M. Calabro, Florida TaxWatch president and CEO.

Calling risk diversification one of the tenets of viable insurance coverage, TaxWatch said the financial risk of damage from a hurricane hitting Florida is largely concentrated within Citizens Property Insurance Corp., "rather than being spread around the country and the globe."

The study found that 99.9 percent of the $512.8 billion in exposure is held within the state, "compounding the instability within CPIC."

Any proposals to fix this situation should aim to have CPIC set market-oriented rates, restore CPIC to truly being the insurer of last resort as it was intended, and include a quantitative analysis to ensure the proper protection of Florida taxpayers, said Calabro.