For the first time since 2004, Floridians had more to celebrate on New Years Day than just the dawn of 2015. Floridians could also celebrate the elimination of hurricane tax assessments on their insurance policies -- a real savings for families and small businesses.
Insurance policies issued or renewed after Jan. 1, 2015, which includes automobile, business, homeowner, charity, religious institutions, rental, local government and school boards, will no longer include the Florida Catastrophe (CAT) Fund Emergency Assessment hurricane tax.
The assessment, which resulted from the 2004-2005 back-to-back hurricanes, will end a year early thanks to actions taken early last year by Gov. Rick Scott and the state Board of Administration.
This is great news for Florida families and small businesses, and further evidence that Florida is moving in the right direction. More and more Floridians are getting back to work, our states population is growing Florida just surpassed New York to become the third most populous state in the country, our housing market is improving, Floridas students are topping national rankings and now Floridians are realizing a true savings on their insurance.
While Floridas storm-free years have benefited Floridians by eliminating hurricane tax assessments, it would be irresponsible to believe Florida will forever be spared from future costly storms. Now is the right time to prevent hurricane taxes from creeping back onto insurance policies by looking to private-market solutions to absorb Floridas future hurricane risk.
The 2004-2005 hurricanes resulted in more than $70 billion in damages, and the CAT Fund reimbursed $28.98 billion for residential losses over those two storm seasons. However, what resulted was a 1.3 percent assessment on all insurance policyholders to pay back $2.6 billion in unfunded liabilities -- thats $350 million to $500 million collected from policyholders annually.
Despite the CAT Funds good health -- $10.9 billion in cash on hand one storm or a series of storms like 2004-2005 could again deplete the funds and leave Florida insurance policyholders at risk. Thats why the Florida Chamber has long-supported reforming Floridas CAT Fund -- to better protect Floridas families and businesses from financial disaster.
Mark Wilson is president and CEO of the Florida Chamber of Commerce. He can be contacted at email@example.com.