The state of Florida may again turn to bonds, and the public, to provide much-needed funding for its Hurricane Catastrophe Fund.
A recent securities filing by the Florida State Board of Administration shows it aims to generate between $1.5 billion and $3.8 billion through the sale of bonds. These funds will then be allotted to the state’s Hurricane Catastrophe Fund, replacing existing bonds set to mature in 2025.
The Hurricane Catastrophe Fund reimburses property insurers in the wake of hurricane-related losses.
The Sunshine State’s risk of weather-related damage has contributed to Florida’s high home insurance costs. On average, Florida homeowners pay $7,788 per year for insurance — making it the most expensive state for home insurance, according to Insurify data.
A proactive measure
While these bond sales draw attention to the weather’s impact on insurance costs, experts see this latest sale by the Florida State Board of Administration as a proactive measure rather than one to satisfy an immediate need.
Gina Wilson, the chief operating officer of the Florida Hurricane Catastrophe Fund, stated the bonds provided “additional capital at an established interest rate and the ability to access funds quickly in the event of a significant storm event.”
What’s next?
Florida’s Hurricane Catastrophe Fund reports it has paid out $1.9 billion in reimbursements since Hurricane Ian’s arrival in 2022. It also estimates it will pay out an additional $8.1 billion by 2028, meaning bond sales will be applicable now and, likely, in the future as well.
The board’s filing indicates it expects the bonds — Series 2024A — to price no sooner than March. It will issue an official statement for investors before selling the bonds.
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