Irma May Force Florida Insurers to Turn to Deeper Pockets
- 7 years ago
Irma May Force Florida Insurers to Turn to Deeper Pockets
It’s the first time in history that every county in Florida was on hurricane watch.”
Using the same benchmark as Mr. Hamid, Mr. Petrelli said he believed his Florida client insurers could withstand
a storm like Hurricane Andrew, mainly because they currently hold more reinsurance than ever.
“We make them buy more reinsurance every year,” he said of his Florida clients, “because the value of homes
goes up every year, the number of homes goes up every year, and the cost of repairs goes up every year.”
The insurers pass at least some of the cost on to their customers.
Long before Hurricane Irma started bearing down, Mr. Hamid stress-tested the larger homeowners’ insurers in Florida and found
that they would withstand a worst-case scenario, as he defined it at the time: a storm like Hurricane Andrew.
“When I saw Irma’s track, I was tremendously concerned.”
Whether policyholders can be made whole may depend on reinsurance — the custom-tailored insurance
that the Florida insurers themselves take out — and other financial vehicles that they have to fall back on.
But with the number of variables at play — the exact path of the storm, the companies’ balance sheets
and the details of their reinsurance contracts — some insurers could stand strong while others are washed out.
It’s the first time in history that every county in Florida was on hurricane watch.”
Using the same benchmark as Mr. Hamid, Mr. Petrelli said he believed his Florida client insurers could withstand
a storm like Hurricane Andrew, mainly because they currently hold more reinsurance than ever.
“We make them buy more reinsurance every year,” he said of his Florida clients, “because the value of homes
goes up every year, the number of homes goes up every year, and the cost of repairs goes up every year.”
The insurers pass at least some of the cost on to their customers.
Long before Hurricane Irma started bearing down, Mr. Hamid stress-tested the larger homeowners’ insurers in Florida and found
that they would withstand a worst-case scenario, as he defined it at the time: a storm like Hurricane Andrew.
“When I saw Irma’s track, I was tremendously concerned.”
Whether policyholders can be made whole may depend on reinsurance — the custom-tailored insurance
that the Florida insurers themselves take out — and other financial vehicles that they have to fall back on.
But with the number of variables at play — the exact path of the storm, the companies’ balance sheets
and the details of their reinsurance contracts — some insurers could stand strong while others are washed out.