Can Floridas insurance companies handle claims from a second major hurricane?
Major insurance agencies say they will be able to handle a second hurricane the size of Charley, aided by the hurricane deductibles now in place, reserves built up through higher premiums and a state catastrophe fund that will help insurers cover payouts if insured storm damage exceeds $4.5-billion. Charley caused about $7.4-billion in insured losses. The stability of the system would be tested if Frances causes $30-billion to $50-billion in damage. If Hurricane Frances comes through Florida, will the 2 percent hurricane deductible apply to homeowner insurance claims even in areas that don’t get a direct hit? The insurance commissioner and Office of Insurance Regulation determine which areas were affected by a hurricane, and that can include areas that did not take a direct hit. Also, the deductible does not apply to damage from a tropical storm (such as Bonnie), only to damage from a hurricane.
