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Report: Active hurricane season may be problem for state-run insurer

Posted On Mon, June 20, 2011

It could be a costly year for Florida's state-run insurer, according to a local television station's investigation.

WFTV reports that Florida's state-run insurance company, Citizens Insurance, would be operating in the red if the state is hit with one major hurricane and may not be able to pay for all of the home insurance claims.

"I consider myself that average homeowner, and I am very concerned," said state Senator Alan Hays in an interview with the station.

Based on the news station's investigation, Citizens would be in the hole $17.3 billion if the state is hit with a hundred year storm, while a 25-year storm would lead to a deficit of $2.6 billion.

"That is woefully inadequate," Hays told the station.

Representatives for Citizens told the station that while its on-hand cash levels are low, it has access to a special catastrophe fund. Nevertheless, the likelihood of having to dip into this fund are low because the chances of such a storm hitting the state is minimal, the insurer told WFTV.

The National Hurricane Center says the season's second named storm, Beatriz, formed on the Pacific coast over the weekend.

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