By Mike Vasilinda
6:54pm August 25, 2006
In a small, dark, crowded conference room in Tallahassee, the state got into the business of insuring hurricane risks for small businesses.
John Collins, JUA Chairman, said, “We may stimulate the public market, the private market in order to provide the types of insurance coverages that are required."
Through a private administrator, the state will offer up to a million dollars of hurricane coverage to businesses, but it won't be cheap: $1.49 for every one hundred dollars of coverage. The move is making private insurers nervous.
Sam Miller of the Florida Insurance Council said, “Like, you know, the number of businesses, say at the end of September. How many businesses do you believe will be in this program? What do you think the total exposure is going to be?”
If the state ends up selling a thousand policies for a million each, it will be at risk for a billion dollars, yet will have collected just $150 million in premiums.
If the losses exceed that $150 million collected in premiums, then every policyholder in the state will be responsible for picking up the tab, all of which puts the state deeper and deeper into the insurance business.
Rep. Don Brown, (R) DeFuniak Springs, said, “If this program offered through this JUA runs a deficit, then I can assure you that the taxpayers of Florida will be asked to pick up the tab."
The coverage is expected to be available on September 1.
Policies are limited to a million dollars of coverage on a building and policies can only be written to businesses that do less than two million dollars a year in sales.