In the race for Florida governor, Republican U.S. Rep. Byron Donalds has launched a television ad targeting his Democratic opponent, David Jolly, over a proposed overhaul of the state’s property insurance system, labeling it a $1,000 “hurricane tax.”
Jolly strongly disputes the characterization. He maintains that his proposal—shifting hurricane windstorm coverage away from private carriers and into a state-managed fund—would slash homeowner premiums by 60% to 70%.
Both gubernatorial hopefuls insist data supports their respective claims. To clear up the confusion, we consulted insurance experts, reviewed relevant research, and analyzed what this political clash actually means for Florida homeowners.
Donalds’ September ad claims that Jolly’s proposal would impose a recurring annual cost of $1,000 on every family in Florida, driving up expenses for home, auto, and renters insurance alike.
However, the ad stretches the findings of a recent study. Rather than evaluating Jolly’s specific platform, the referenced research actually examined a 2024 Florida House legislative proposal.
Researchers at Florida State University modeled the financial impact of having Citizens Property Insurance Corp., the state’s public insurer of last resort, assume all residential wind coverage. The $1,000 estimate stems from a worst-case scenario where a series of catastrophic storms depletes Citizens’ financial reserves, triggering temporary emergency fees for policyholders.
While a similar fee mechanism could theoretically occur under Jolly’s proposed fund if it operated under rules identical to Citizens, such outcomes are entirely speculative and not guaranteed to happen annually, contrary to the ad’s implication.
Insurance specialists caution that Jolly’s approach might simply redistribute the financial burden of hurricanes rather than truly eliminate it. They also point out that critical questions remain regarding how the proposed fund would be initially capitalized, managed, and sustained amid the inherent volatility of major storm seasons.
Here is a closer look at the facts behind the competing claims.
Could homeowners insurance really drop by 60% to 70%?
Jolly argues that Florida desperately needs a fresh approach to a property insurance market that has long suffered from the highest rates in the nation, driven largely by hurricane exposure. Donalds, by contrast, favors building on recent legal reforms designed to curb frivolous lawsuits alongside the creation of an insurer transparency scorecard.
Florida’s history with state-backed financial backups dates back to 1992, when Hurricane Andrew inflicted over $26 billion in damage (equivalent to more than $61 billion today). In response, the state established the Florida Hurricane Catastrophe Fund to stabilize the private market.
Acting as a reinsurance backstop, the catastrophe fund reimburses private insurers for a portion of major hurricane losses, relying primarily on investment returns and industry assessments. As of late 2025, the fund held a balance of $9.6 billion, with projections reaching $12 billion by the end of 2026 barring any major storms.
Jolly’s model proposes transforming this framework into the primary provider for wind coverage, requiring a capital reserve of at least $32 billion. (Separate federal flood insurance policies would remain untouched by the plan.)
While Jolly has not published a comprehensive operational blueprint, he noted that homeowners wouldn’t need separate wind policies and suggested the state fund could leverage private companies to service claims.
His campaign estimates that removing wind coverage from a typical $300,000 home—where owners currently pay roughly $7,136 annually—could drop total costs to about $2,556, yielding a 64% reduction.
Experts agree that removing wind risk from private policies would lower initial bills, but they doubt the savings would match Jolly’s projections.
Gabriel Carrillo, risk management program director at the University of Central Florida, notes that eliminating private profit margins would indeed cut costs. However, a state-run fund would incur significant administrative overhead to handle claims. Furthermore, removing private wind protection entirely means “the risk would then be borne by all consumers, not just homeowners.”
Karen Clarke, a catastrophe risk modeler, points out a fundamental reality: Florida accounts for roughly 60% of total U.S. hurricane risk due to geography and trillions in coastal assets, a reality no funding structure can alter.
No U.S. state currently operates a fund that absorbs 100% of primary wind claims. The closest parallel is the National Flood Insurance Program (NFIP), which was launched to make high-risk coverage affordable. Over time, however, claims outpaced revenue, leaving the program billions in debt to the U.S. Treasury even after Congress forgave substantial portions of it.
Carrillo warns that government-run programs are consistently vulnerable to underpricing risk. Maintaining solvency requires raising additional capital after major disasters—an action that often triggers intense political pushback against higher consumer costs.
How could Jolly’s plan drive up costs for all residents?
The August study cited in Donalds’ campaign ad was conducted by the Florida Legislature’s Office of Program Policy Analysis and Government Accountability (OPPAGA). While not publicly published, the document was provided to researchers by both OPPAGA and the Donalds campaign.
The analysis explored what might happen if all residential wind policies were transferred to Citizens while private insurers handled only non-wind hazards like fire. (It did not directly evaluate Jolly’s proposal.)
Researchers found potential benefits, including greater pricing uniformity and the elimination of the primary trigger for private insurer insolvencies, which might encourage more companies to write non-wind policies in the state.
However, downsides include reduced market competition and heightened vulnerability to political interference in rate-setting. Consolidating all of Florida’s wind exposure into a single state entity creates a massive single point of financial failure, which could ultimately drive up taxpayer costs.
Concentrating risk in one state-backed organization would lead to a “significant geographic redistribution of costs,” effectively imposing a hidden “hurricane tax” across nearly all lines of insurance, the report cautioned.
This “tax” refers to emergency assessments permitted under Florida law. If public insurers like Citizens or the catastrophe fund exhaust their reserves and fall into a deficit, they can levy emergency surcharges—mirroring the scenario in the study where families might temporarily face $1,000 annual assessments following a catastrophic storm.
Because these charges can be applied across nearly all insurance types—including auto, home, and business policies—and compliance is mandatory, they function effectively as a statewide bailout tax.
How financially resilient would the fund be?
Jolly counters that the FSU study relies on traditional statutory frameworks that his plan seeks to reform. He highlights reinsurance—often called insurance for insurance companies—as a crucial safety net.
Reinsurance enables primary carriers to transfer portions of their risk to massive global reinsurers, providing the financial backing needed to operate in high-risk coastal zones without risking bankruptcy after major disasters.
“The state fund buys reinsurance, just like any capital fund would do that would absorb risk, which is another fail point when Donalds says the state’s exposed,” Jolly argued.
Even so, industry professionals question whether global reinsurers would be willing to shoulder that magnitude of risk for an entire state, noting the cost would likely be astronomical.
“I just don’t know how a government fund will do this cheaper and more efficiently than a widely diversified industry,” Carrillo said.
Jeff Brandes, a former Republican state senator and head of the Florida Policy Project, noted that even if a state fund could secure solvency through proposed revenue streams like tourist taxes or real estate fees, long-term scale and sustainability remain major hurdles.
“We are talking about billions of dollars every year that you would have to set aside. We could have a hurricane next year that costs $100 billion, we don’t know, and we are trying to diversify that risk, not put it in one place,” Brandes said.
Experts emphasize that private insurers benefit from a highly resilient international funding network that disperses risk across global capital markets, private reinsurance firms, and catastrophe bonds.
Jolly indicated that if a finalized version of his proposal demonstrates clear cost savings for consumers, he would likely pursue it via a statewide ballot initiative.