The 2004 and 2005 Hurricane seasons battered Florida. 8 storms, highlighted by 2005’s Hurricane Wilma, cost the state’s Hurricane Catastrophe Fund more than 9 billion dollars.
“We paid the claims but we’re still paying off the bonds that were necessary so the claims could quickly be paid off 8 years ago," Sam Miller of the Florida Insurance Council said.
That state charged insurance customers assessments to help foot the bill. The so-called hurricane tax collected between 350 and 500 million dollars for the CAT fund since 2007. A 1.3 percent charge on home and auto policies will be ending this January.
The Florida Insurance Council says putting money back in people’s pockets doesn't hurt.
“It’s a very good thing that CAT Fund assessments are ending. It means a 1.3 percent reduction in insurance rates," Miller said.
Just because the assessment is going away for now doesn't mean it will be gone forever.
The CAT fund has about 17 billion in reserves. But Florida TaxWatch Chief Economist Jerry Parrish says a bad year could wipe that money away.
“Just because we’ve paid for this last series of storms and we have some cash, doesn’t mean that there’s no probability of assessments. We still could have assessments if there is a large enough storm or series of storms," Parrish said.
The assessment was scheduled to end in July of 2016 which means the 1.3 percent savings is coming 18 months early.