Facing a crisis in property insurance, Florida residents may soon be assessed a new 1% fee.

As more insurers fail or leave the state, Florida homeowners should anticipate another increase in insurance costs. On March 31, the Florida Insurance Guaranty Association (FIGA), which manages claims when insurance companies fail, decided to request state regulators to levy a 1% emergency “assessment” to help fund claims from insurance businesses that may or may not have gone bankrupt.
“The emergency assessment is required to secure funds for the payment of covered claims, to pay the reasonable costs of administering such claims, including claims from insurance companies that have become insolvent or may become insolvent as a result of losses incurred due to hurricanes including, but not limited to, Hurricanes Irma, Michael, and Ian, and to secure bonds issued to generate revenues to pay claims,” the emergency assessment reads.

FIGA intends to borrow $150 million to help close the gap, then issue up to $750 million in Insurance Assessment Revenue Bonds to settle the debt and pay for the remaining claims.

The assessments will be collected from policyholders by insurers beginning in October, and the money will be sent to FIGA “until the end of the assessment year in which all of the bonds have been paid in full and there are no longer any outstanding bonds.”
The evaluation comes as Florida struggles to resolve a property insurance crisis that has driven up premiums and forced businesses out of business.

According to the Florida Department of Financial Services, seven insurers have declared bankruptcy since last year. Premiums have also skyrocketed, with experts in the field predicting a 20 to 25% increase by June.