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Florida Cat Fund to purchase $2.2B in reinsurance

'Minimal' rate increases are on the way for Florida homeowners.

By Caterina Pontoriero | Updated on April 20, 2015
The $2.2 billion deal will allow the Florida Cat Fund to reach its state-mandated ceiling of $7 billion to cover all storm claims in a single season. (Harvepino/Shutterstock.com)

Florida Gov. Rick Scott and members of his cabinet voted last week to add $2.2 billion of coverage to the state’s catastrophic insurance fund, according to The Tampa Bay Times. The decision was made in anticipation of what is being predicted to be another quiet hurricane season for Florida.

The vote approved a two-part transaction in which the state will buy $1 billion in reinsurance, transferring that risk to the private insurance market, reports The Tampa Bay Times. Another $1.2 billion in coverage will be secured from the issuance of bonds. The deal will allow the Florida Cat Fund to reach its state-mandated ceiling of $7 billion to cover all storm claims in a single season.

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