The powerful hurricanes that have devastated the East Coast are putting the financial stability of state-run insurance plans back in the spotlight, POLITICO’s Zack Colman reports.
Hurricanes Helene and Milton have put the spotlight on Florida’s vulnerable state-backed insurer, which says it can cover new losses through its reserve and catastrophe fund. It could also raise rates for all Florida policyholders, whether for property or otherwise, to plug the gap — even if they live nowhere near the disaster zone.
In North Carolina, insurers on Monday argued for an average 42 percent rate hike in a hearing before the state insurance commission, noting Helene and other storms have ballooned losses.
But there’s also California, where the state-mandated, insurer-backed FAIR Plan is on the verge of failing under the weight of wildfire risk, as plan president Victoria Roach told lawmakers earlier this year.
“I’m pretty skeptical of the longer-term willingness of states to continue to shoulder the burden,” said Benjamin Keys, a real estate and finance professor at the University of Pennsylvania’s Wharton School.
