The Florida Hurricane Catastrophe Fund is expected to have approximately US$6.72 billion in cash available to pay claims during the 2025 storm season, according to a report by the fund's advisory council.
The report also indicated that the fund, known as the Cat Fund, would have access to an additional US$3.25 billion through pre-event bonds, a form of financing secured before the start of the hurricane season.
The Cat Fund serves as a public reinsurance mechanism, offering low-cost backup coverage to property insurers operating in Florida. Participating insurers must absorb a pre-determined level of losses – similar to a deductible – before the fund contributes to claims. Insurers also rely on private reinsurance in conjunction with the state-run program.
The Cat Fund is statutorily authorized to cover up to US$17 billion in losses. In addition to its cash reserves and pre-event bonds, the fund can issue post-event bonds if necessary to meet its obligations up to that limit.
According to the report, estimated losses from Hurricane Milton, which impacted the state in 2024, are projected at US$3 billion. Losses from Hurricane Helene are expected to reach US$10 million, while no losses are anticipated from Hurricane Debby.
In comparison, losses attributed to Hurricane Ian in 2022 remain significantly higher, with estimated costs reaching US$8.5 billion.
Florida’s 2025 hurricane season begins June 1 and will run for six months. The financial readiness of the Cat Fund is considered a critical factor in maintaining stability within the state's insurance market during periods of elevated storm activity.
Established in 1993, the FHCF is a state-administered reinsurance program following the devastation of Hurricane Andrew in 1992. Its primary purpose is to provide reimbursements to residential property insurers for a portion of their catastrophic hurricane losses in Florida, thereby stabilizing the insurance market and ensuring the availability of coverage for homeowners.
In the 2024 hurricane season, the FHCF faced significant financial obligations due to the impacts of Hurricanes Milton and Helene. Preliminary estimates indicated that the fund could pay out approximately US$4.6 billion in claims related to these storms.
Despite the substantial payouts, the FHCF maintained sufficient liquidity, with US$7.12 billion in cash reserves and access to an additional US$3.25 billion through pre-event bond financing.
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