Florida turning to Warren Buffett for hurricane fund bailout

State turning to Warren Buffett for hurricane fund bailout
Daytona Beach News-Journal - Daytona Beach,FL,USA
By JIM SAUNDERS
Tallahassee bureau chief

TALLAHASSEE -- Worried about financial problems if major hurricanes slam Florida, state leaders are turning to billionaire Warren Buffett for backup.

Gov. Charlie Crist and two Cabinet members moved forward Wednesday with a plan to pay about $224 million to the Buffett-led firm Berkshire Hathaway to help protect the state against catastrophic storm damages.

In exchange for the money, Berkshire Hathaway would agree to buy $4 billion in state bonds if a mega-hurricane -- or multiple big hurricanes -- hit the state.

The deal would partly shore up the Florida Hurricane Catastrophe Fund, a state program that sells low-cost reinsurance to property-insurance companies. Reinsurance is a type of coverage that insurers buy to help pay claims after hurricanes.

With the nation's financial markets in disarray, state officials have grown increasingly concerned the catastrophe fund would not be able to borrow enough money to meet its obligations after a Hurricane Andrew-type storm.
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When we moved to Florida from Massachusetts, it was June of 2004. Yes, that infamous year here in Central Florida. We were told over and over again that hurricanes never hit Central Florida, reminded the last one had hit over 30 years before we moved in. That changed with Charlie, Francis and Jeanne. Ivan missed us.

When Charlie came roaring through, no one was prepared for it. It wasn't supposed to hit here. Patio doors, which we have two sections of them, were being pounded by the wind. We were lucky and they didn't blow in but several of our neighbors were hit harder. The entire street looked like a battle zone as shocked neighbors staggered out of their homes early in the morning. The worst part of Charlie was that it hit at night. Tornadoes touched down but thankfully these tornadoes were not the size of the strength that hit other parts of the country. They did a fair amount of damage though.

Given the fact that I was accustomed to white outs from snow storms back home, it was and still is extremely difficult to drive thru rain outs when the rain comes down so hard you cannot see the front of your car. That was hard to take and I was thinking it was a mistake to move down here until the hurricanes came. Then I was sure it was. It took a long time to get over that feeling. Four years later, as soon as June arrives, I begin to wonder if we will get hit again. It's normal to worry about all of this, but we are as prepared as we can get.

The day after Charlie hit, we were down Home Depot buying plywood. We stacked it on top of our car and as we drove down the street, our neighbors were laughing. They thought it was funny we bought plywood the day after the hurricane. By the time Francis was heading this way, they were not laughing any more.

Now we have sheets of plywood in our garage, cut and stained to preserve them and ready to get nailed up just in case.