How the Florida Legislature Gets You to Pay the Home Insurance Bills of Others

Hurricane Catastrophe Fund that requires all licensed Florida home insurance companies to purchase reinsurance once the cost of a major hurricane exceeds a certain level. This fund is insurance for Florida insurance companies and helps to make sure that they don’t have to absorb all of the costs of a major hurricane event.

Finally, Florida created a legal entity called the Florida Insurance Guaranty Association (FIGA) that will pay your insurance claim if your Florida homeowners insurance company is declared insolvent.

Those special assessment line items on your Florida home insurance bill can cause you to pay line item charges for many years into the future. You can be asked to make up the difference when Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund don’t have the money to meet their obligations. Or you could be assessed for the difference if FIGA doesn’t have the cash to pay off the claims filed against a Florida homeowners insurance company that became insolvent.

So far, at high level, each of these various entities and the protections that they offer make sense. And when they work properly they do help further diversify Florida’s hurricane risk and help make it attractive for Florida home insurance companies to continue to do business in the state.

However, the Florida Property Insurance Legislation of 2007 and 2008 have changed and politicized the mission of each of these organizations to a point where they no