Two hundred thirty five companies write property insurance in Florida. Major reforms after Hurricane Andrew are the reason why more of them are not going belly up.
The Insurance Council says no other state could handle the claims being paid here, but cautions insurance could come soon come at a higher cost.
Sam Miller with the Florida Insurance Council says, "Sure, there may be some modest rate increases but all of that to make sure that if there is another hurricane season from hell like we’ve had that we can pay all of those claims, like we are going to pay all of these claims."
Inland central Florida could soon be the industry’s first test rate filing. Three storms there have shown the area is not immune.
"Residents from one end of the state to the other may soon have to pick up some of the claims being paid by the state’s high risk insurer. That’s because citizens has claims exceeding its cash."
Under state law, citizens can assess fees on every policy written in the state. For now, CFO Tom Gallagher says it’s too early to say what will be needed.
“Citizens of course has the ability to issue bonds if necessary, and will," says Gallagher.
But with one company already in financial trouble and several others on the edge, insurance agents say the writing is on the wall.
Jeff Grady of the Florida Association of Insurance Agents says, "You know in my own personal household I would think 10 percent would not be out of the question."
The good news is that any rate hikes will be far smaller than post Andrew and that insurance will still be available.
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