Florida Hurricane Disaster Fund

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Florida Homeowner Insurance News: Florida Hurricane Disaster Fund Has Three Billion Dollars Set Aside for Hurricane Dennis Victims

July 12, 2005

Florida's hurricane disaster fund, whose reserves were tapped heavily in 2004, has nearly $3 billion for claims from Hurricane Dennis and any other storms that may hit the state, a spokesman said on Tuesday.

"It's still early, and it may be weeks or months before the claims start coming in," said Mike McCauley of the state agency that includes the Florida Hurricane Catastrophe Fund. "It takes several weeks for the assessments to be done."

Risk assessment groups put initial estimates for U.S. insured damages at $1 billion to $5 billion from Dennis, which this week struck northwest Florida and other southern U.S. states.

The Florida catastrophe fund, which was created after a severe 1992 hurricane in south Florida, is a reinsurance entity that pays some claims for housing losses incurred by member insurance companies. It is funded by premiums paid by about 200 insurance companies and has authority to issue revenue bonds.

For 2004, when four major hurricanes struck Florida, the fund paid out about $3.5 billion to insurance companies claiming extraordinary losses.

The fund now has nearly $3 billion on hand and expects to have about the same amount of reserves at year end after paying claims from Dennis and any other storms, McCauley said.