Florida Hurricane Catastrophe Fund could pay out $4.6 billion
TALLAHASSEE - A state program that provides critical backup coverage for property insurers could pay out an estimated $4.6 billion because of claims from Hurricanes Milton and Helene, officials said Wednesday.
If that preliminary estimate holds, the Florida Hurricane Catastrophe Fund would have adequate cash to cover its share of losses, leaders and a financial adviser told members of the Florida Hurricane Catastrophe Fund Advisory Council. The vast majority of estimated losses stem from Hurricane Milton.
Widely known as the "Cat Fund," the program provides relatively low-cost reinsurance to property insurers. Carriers must pay losses up to certain amounts, known as retention levels, before they can tap the state fund.
The Cat Fund is projected to have $7.12 billion in cash to pay losses this year and has access to $3.25 billion in what is known as "pre-event" bond money if needed.
"Initial estimates for Hurricane Helene and Hurricane Milton as it relates to the Cat Fund are at $4.6 billion, which the Cat Fund can cover with its current available cash," said Chris Spencer, executive director of the State Board of Administration, an agency that includes the Cat Fund.
The preliminary estimate includes $4.5 billion from Milton, which made landfall Oct. 9 as a Category 3 storm in Sarasota County before continuing across the state as a hurricane. The estimate includes $100 million for Helene, which made landfall Sept. 26 in Taylor County after causing extensive damage to other coastal communities as it moved through the Gulf of Mexico.