Who wouldn’t like a break on their insurance bills? Floridians will be relieved to know they will not have to pay a surcharge on insurance policies for a hurricane catastrophe fund for much longer. As many of us remember; the 2004 and 2005 hurricane seasons brought record hurricane activity to Florida. There were eight storms to hit Florida during that two year period. Florida consumers have gotten all too used to paying a portion of their insurance premium toward a hurricane catastrophe fund. It was a 1.3% surcharge on many insurance policies in the State, including homeowner and auto policies. Some people have called the surcharge a “hurricane tax.”
The State of Florida placed the emergency assessment on insurance bills when the backup fund used to help private insurers pay off claims ran out of money after Hurricane Wilma. According to reports, the Florida Hurricane Catastrophe Fund borrowed $2.61 billion to reimburse private insurers. The surcharge was initially expected to remain on insurance bills until July 2016.
However, last Tuesday State officials agreed to end that surcharge placed on the insurance policies.1 Policies issued on or renewed on or after January 1, 2015, will no longer include the surcharge.
This is good news for consumers who will no longer have to pay this “hurricane tax.”