Florida ‘Hurricane Tax’ Sent to Early Retirement

A 1.3 percent surcharge on most property/casualty policies in Florida to help pay for past hurricane claims is coming to an end earlier than originally planned. The Florida Cabinet voted this week to end the assessment on policyholders that was begun in 2008 and was expected to continue until 2016.
State law requires an assessment whenever the Florida Hurricane Catastrophe Fund (FHCF) does not have enough cash to pay insurers for the losses they incur. The surcharge, called the “hurricane tax” by some, is used to fund revenue bonds to pay the losses. FHCF ran out of money following Wilma, which was the fourth storm of 2005 and the eighth storm that hit the state during a two-year period.