Florida to sell $625 million in bonds

06/10/08 Mitch E. Perry
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Gov. Charlie Crist and Chief Financial Officer Alex Sink today approved the sale of up to $625 million in bonds to pay claims from Hurricane Wilma.

That means Floridians will pay surcharges on their car, boat, home and business insurance for two additional years to pay off the bond holders.

Crist and Sink approved the sale of the bonds to keep the Florida Hurricane Catastrophe Fund from running out of money.

According to the director of the State Board of Administration, Bob Milligan, the account has about $160 million left, enough for the next two or three months.

The catastrophe fund pays property insurance claims when private insurers can not. When the catastrophe fund comes up short, assessments are tacked on to other premiums.

Florida policyholders are already paying a 1-percent surcharge because the catastrophe fund was short on what was needed for claims in the 2005 hurricane season that caused billions of dollars in damages.

Those assessments were scheduled to end in 2012, but now will extend to 2014 with today’s decision.

Walter Dartland is executive director of the Consumer Federation of the Southeast. He said at this point, the governor and CFO had little choice but to approve a bond to pay for previous claims.

Crist and Sink both expressed concern that insurance companies are still paying claims for Hurricane Wilma, including more than 6,000 that have been reopened after initially being denied.

Crist said he was concerned about how many of those claims were legitimate, adding "I don't have a whole lot of confidence in the property insurance industry.''

The Associated Press reports that more than 6,000 claims for Wilma damage that have been reopened after initially being rejected. Sink said there have been about 1,600 new claims in the last year from the storm, which mostly affected Broward, Miami-Dade and Monroe counties.

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