Florida Cat Fund Credit Rating Drops
I recently wrote about the Florida Catastrophe Fund, and stories concerning its probable inability to pay claims if a major hurricane were to hit in the present credit market. Rating agencies are catching on to the problem.
In a story buried at the bottom of the business section of the Tampa Tribune, AM Best warns that Florida's Catastrophe Fund would "run into difficulty" if a major hurricane hit. The word "difficulty" could be "impossibility" if an Andrew-type storm struck metropolitan Dade or Tampa Bay.
The good news is that there are no threatening storms on the horizon, and we are getting later into the hurricane season so that a major storm is unlikely. Further good news is that the likelihood of a major hurricane striking those populated areas of Florida is remote. However bad things always seem to happen at the worst time. Thus, unless this credit crunch magically goes away, the probability of a bad storm striking the wrong place next year goes up because "stuff" happens at the wrong time. Let's hope, for many reasons, that the credit market improves before next year's hurricane season.
