Floods are the nation’s most costly natural disaster, according to FEMA. | Adobe Stock
Like many companies, HCI Group Inc. increased its catastrophe reinsurance, growing it by approximately 31% with a $1.93 billion total limit.
The coverage for catastrophic losses in a single event in HCI’s reinsurance program provides up to $1.4 billion, Reinsurance News reported. That doesn’t include flood losses. The insurer calculates that is enough coverage for the maximum loss expected from a one in 320-year storm, based on models prepared by the Florida Office of Insurance Regulations. In 2019, HCI secured only enough for its catastrophe reinsurance limit to cover the probable loss from a one in 282-year storm.
The company has reported both Homeowners Choice Property & Casualty and TypTap Insurance have premium growth. For these two subsidiaries, retention is approximately $16 million each for the first and second events, not including flood coverage, Reinsurance News reported.
Hurricanes, tropical storms and tornadoes are covered by the reinsurance, with flood protection coverage in a separate contract.
Only storms that the National Hurricane Center designates as hurricanes will be covered in HCI’s agreement with the Florida Hurricane Catastrophe Fund.
The insurance company contracts with Bermuda-based Claddaugh Casualty Insurance to selectively retain risk, paying $9.7 million in premiums to provide its insurance subsidiaries with $24.6 million in first even coverage and second event coverage of $13.8 million, Reinsurance News reported.
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