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Florida Protected, For a Price

July 29th, 2008 by flanews

If a large enough hurricane hits Florida and the total amount of damage reaches the 16 billion dollar mark a Warren Buffet company will come to the rescue, for a price. A reluctant State Board of Administration voted two to one to buy hurricane coverage from Buffets Berkshire Hathaway company. The deal allows the state to borrow four billion dollars from the company if storm damage exceeds 16 billion dollars. As part of the deal the state will have to pay the company more than 220 million dollars a year for the extra coverage. Attorney General Bill McCollum voted against the deal.

The odds of our having to need this money are about three to four percent. Thats what statistics show, thats the relevant study done before we ever undertook when looking at whether we needed more liquidity, said McCollum.

Floridas Chief Financial Officer Alex Sink, expressed concerns with the deal, but went along with Governor Charlie Crist in approving the extra insurance saying at this point there are no other options available to sure up the Catastrophe fund.

Posted in Cabinet, Charlie Crist, Hurricane Season, Insurance, McCollum, State Budget, State News, Weather | 1 Comment »

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