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President-Elect Supports National Cat Fund

November 7th, 2008 by flanews

President-elect Barack Obama spent a lot of time on the campaign trail trying to woo Florida voters. Obama sympathized with Floridians paying high insurance premiums and expressed the need for a national catastrophe fund to stabilize rates. As Whitney Ray tells us, now that Obama has won the White House many Florida insurers are chomping at the bit for help from Washington.

For years Floridas insurance companies have been fighting with the state over rate hikes. Insurers say an increase is needed to prepare for a major hurricane.

We have two trillion dollars of exposure and 1,100 miles of coast line on two different bodies of water and thats all out in the middle of hurricane alley, said FAIA spokesman Bob Lotane said.

The state catastrophe fund offers insurance companies more than 20 billion dollars in protection, but some fear its not enough.

Experts say if a major hurricane hits one of Floridas bigger cities it could drain the cat fund and bankrupt the state.

While on the campaign trail in late September, President-elect Barack Obama recognized Floridas need for more protection.

I think its very important that the people of Florida are able to get insurance. I think the national government has to provide some help, said Obama in a late September interview.

Floridas Chief Financial Officer Alex Sink agrees.

That means the federal government will step in if we have truly a big catastrophic storm like a 25 or 30 billion dollar cat five storm and it will help us stabilize our insurance rates, said Sink.

The decision isnt up to President-elect Obama alone. First Congress would have to approve the fund. The federal government already offers assistance with flood and earthquake insurance. Insurance companies say a national catastrophe fund should be the next step.

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