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The Gainesville Sun: Steve Pociask, Better financial preparation for the storm

Wednesday, May 20, 2015

While there is no preventative measure to stop a hurricanes from reaching Florida, preparation is paramount and it requires going beyond buying generators and stocking up on batteries, bread and water. It requires financial preparation, which is something that Florida leadership has been focused on in recent years.

In March, Citizens Property Insurance Corporation, the state-backed insurer of last resort, shrank to below 600,000 policies, well below its 1.5 million peak in 2005. Resulting from five years of efforts by Citizens leadership and Florida policymakers, Citizens is in a better financial position to weather the storm.

Additionally, the State Board of Administration (SBA) enhanced the state’s financial resiliency when it authorized the Florida Hurricane Catastrophe (Cat) Fund to transfer up to $1 billion of potential catastrophic risks and losses to the private market. This coverage is another prudent step in protecting residents, businesses and non-profits from new hurricane taxes in the event of catastrophic losses. The Cat Fund, created to help stabilize the property insurance market, sells insurers $17 billion of back up coverage. By transferring risk, the Cat Fund can now pay its claims and be a financial line of defense in the face of a hurricane.

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