Credit woes could increase Fla. insurance rates

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.

Copyright 2009 The Associated Press.