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