Key Takeaways
- The Florida Hurricane Catastrophe Fund (FHCF) provides reinsurance to Florida property insurers
- FHCF helps keep property insurance available and affordable by spreading hurricane risk
- All admitted insurers writing residential property must participate in FHCF
- FHCF is funded by premiums from insurers and can issue bonds after major hurricanes
- FHCF has different coverage levels: mandatory, TICL (Temporary Increase in Coverage Limits)
Last updated: January 2026
Florida Hurricane Catastrophe Fund (FHCF)
The Florida Hurricane Catastrophe Fund (FHCF) is a state-administered reinsurance program that helps Florida property insurers manage hurricane risk.
Purpose and Function
FHCF was created after Hurricane Andrew (1992) to:
Key Functions
| Function | Description |
|---|---|
| Reinsurance | Provides hurricane reinsurance to insurers |
| Risk Spreading | Spreads risk across all admitted insurers |
| Market Stability | Helps keep insurance available and affordable |
| Claims Funding | Provides funds for catastrophic hurricane losses |
How FHCF Works
Mandatory Participation
All admitted insurers writing residential property in Florida must:
- Purchase FHCF coverage
- Pay annual reimbursement premiums
- Meet retention requirements before coverage applies
Coverage Structure
| Level | Description |
|---|---|
| Retention | Amount insurer pays before FHCF pays |
| Mandatory Layer | Required minimum coverage |
| TICL Layer | Optional additional coverage (Temporary Increase in Coverage Limits) |
Funding Sources
FHCF is funded through:
Revenue Sources
| Source | Description |
|---|---|
| Reimbursement Premiums | Paid by participating insurers |
| Investment Income | Returns on fund assets |
| Revenue Bonds | Issued after major hurricanes if needed |
Emergency Assessments
After major hurricane seasons:
- FHCF can issue revenue bonds
- Bonds repaid through emergency assessments
- Assessments on most P&C policies in Florida
- Up to 6% of premium per year for 10 years
Coverage Limits
FHCF provides substantial coverage capacity:
Current Capacity
| Item | Details |
|---|---|
| Industry Retention | Aggregate retained losses before FHCF pays |
| Coverage Limit | Billions available per hurricane season |
| Co-Payment | Insurers pay a percentage above retention |
Retention and Co-Payment
- Retention: The first dollars of hurricane losses insurers pay
- Co-Payment: FHCF pays 90%, insurer pays 10% of reimbursed amount (typical)
- Capacity: Subject to annual limits
TICL (Temporary Increase in Coverage Limits)
Insurers can purchase additional FHCF coverage:
- Extra layer above mandatory coverage
- Higher reimbursement premiums
- Greater protection for insurers
- Optional election each year
Effect on Premiums
FHCF impacts homeowner premiums:
Premium Effects
- FHCF reimbursement premium is a cost for insurers
- Lower reinsurance costs than private reinsurance market
- Helps keep overall premiums more affordable
- Emergency assessments can increase consumer costs
Exam Tip: Remember that FHCF is a reinsurance mechanism—it reimburses insurers, not policyholders directly.
Covered Losses
FHCF covers:
- Hurricane losses
- Residential property lines
- Condominium coverage
- Tenants policies
- Mobile home coverage
Not Covered
- Commercial property (separate program may apply)
- Non-hurricane losses
- Surplus lines policies
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Test Your Knowledge
What type of coverage does the Florida Hurricane Catastrophe Fund (FHCF) provide?
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Test Your Knowledge
Which insurers are required to participate in FHCF?
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