Credit crisis and hurricanes make bad bedfellows

Monday, October 6, 2008

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BAY NEWS 9 -- With the current credit crisis, if a major hurricane hits Florida there's a chance homeowners won't get their insurance money from their insurance companies.

Insurance companies depend on the state's catastrophe fund, which in turn relies on the credit that Wall Street can't currently deliver.

Sam Miller with the Florida Insurance Council said the state is required to come up with the money, but if the credit markets don't come back, that money could come out of Florida's investment accounts.

"If you need to borrow a lot of money very quickly, it's going to be very difficult to borrow that money quickly as long as the credit markets are as troubled as they are," Miller said.

Officials with Florida's catastrophe fund say they've got enough money on hand to cover a $15 billion storm. To put that in perspective, Hurricane Wilma in 2005 did $11 billion in damage across south Florida.

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