Fla. CFO Warns of Hurricane Preparedness

May 26, 2004

With explosive state population growth and experts predicting the formation of more than 12 named Atlantic storms, Florida’s Chief Financial Officer Tom Gallagher is issuing a warning to consumers: Prepare now.

“Hurricane season is just days away,” said Gallagher. The official start of hurricane season is June 1. “Review your insurance coverage and consider fortifying your home to ensure you are protected if a storm strikes our state. The time to prepare for a hurricane is now, before the storm.”

The National Weather Service has predicted that 12-15 tropical storms will form this year, with 6-8 becoming hurricanes and 2-4 becoming major windstorms.

Gallagher also advised Floridians to take steps to secure their homes and develop an escape plan. “Being prepared can save lives, property and a lot of heartache,” added Gallagher.

Gallagher also alerted Floridians to a new law, recently signed by the governor, designed to increase the availability of homeowners insurance and improve Florida’s ability to recover financially from catastrophic hurricanes.

The legislation makes improvements to Florida’s Hurricane Catastrophe (Cat) Fund, a fund created after Hurricane Andrew to ensure that Florida’s insurance companies could quickly pay homeowners claims after a major hurricane and continue to provide coverage.

The Cat Fund’s capacity will expand from $11 billion to $15 billion in time for the 2004 hurricane season. The Cat Fund currently provides $11 billion of capacity, or reinsurance, which is insurance for insurance companies. The lack of reinsurance available through the private market, coupled with the inability of the Cat Fund to grow with the market, has resulted in a number of consumers being dropped by their insurance companies and forced into Citizens Property Insurance Corporation, the state’s insurer of last resort.

According to Gallagher, several insurance carriers have committed to writing more coverage this hurricane season due to the new legislation, which goes into effect on June 1, 2004.

Representatives from the Department of Financial Services (DFS) will be participating in several Hurricane Preparedness Expos around the state throughout hurricane season. Consumer guides, tips and other useful information will be available from DFS and other organizations concerned with hurricane safety.

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