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Major Disaster Scenario Threatens States Financial Health

September 8th, 2008 by flanews

As Ike rolls through Cuba, Florida remains on high alert. The threat of a major hurricane hitting Miami or Tampa has some people asking if the state can rebound financially. As Whitney Ray tells us, Governor Charlie Crist is praying for the best.

Florida property insurers breathed a collective sigh of relief when Hurricane Ike switched course, sparing Miami-Dade County for now.

Who knows what Ike would have done if it would have struck Miami as a 4 or 5, but it would have been one of the worst disasters Florida has had in decades, said FIC Executive Vice President Sam Miller.

The threat isnt just to life and limb billions of dollars in property insurance claims are also on the line. The state catastrophe fund is good for 20 billion, with a promise to sell eight billion in bonds to cover the rest. The Florida Insurance Council says it could be hard to find the extra cash.

Right now the financial markets are in very bad shape. The states ability to timely sell that additional 8 billion to get it to 28 is very questionable, Miller said.

If the big one hits this year your property insurance would increase. The cat fund was drained it wouldnt just be homeowners who were paying more, assessments would go up on all property, including cars.

Every policyholder in the state would need to pay an estimated 16,000 dollars over the next 30 years. Governor Charlie Crist refused to comment on the scenario, but says hes hoping for the best.

I pray that it doesnt. Im sure you do to, said Crist.

With the states financial health living on a prayer, some private insurance companies are asking for rate increases to prepare for a big storm. This spring lawmakers shot down a measure to lower the states risk.

Posted in Charlie Crist, Housing, Hurricane Season, Insurance, State Budget, State News, Weather | 2 Comments »

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