TALLAHASSEE, Fla. (AP) Florida's insurance commissioner says
the national credit crunch could lead to higher hurricane coverage
premiums and more home foreclosures.
That's because the Florida Hurricane Catastrophe Fund, which
provides backup coverage for insurance companies, is having a hard
time lining up financing, Commissioner Kevin McCarty told the
Senate Ways & Means Committee on Thursday.
If the fund runs out of money, it sells tax-free municipal bonds
to cover remaining claims. It's unlikely the fund could sell enough
bonds if a major hurricane should strike this year because the bond
market is so tight, McCarty said.
The state is exploring other options including seeking a line of
credit from the federal government.