Hurricane Matthew Devastates But May Not Trigger CAT Fund
Hurricane Matthew devastated some communities and spared others as it made its way up the Atlantic coast. Insurers are crossing their fingers as they tally the damage.
The Category Four storm inundated coastal towns like St. Augustine and cut power for more than a million Floridians. But for other areas, Hurricane Matthew had limited impact. Fred Karlinsky co-chairs the insurance practice for the law firm Greenberg Traurig, and he says there’s still a chance the storm won’t trigger payouts from the state’s hurricane catastrophe fund.
“Right now, somewhat it is too early to tell what the loss will be but it is conceivable that the losses will be below that industry retention of $7 billion,” Karlinsky says, “meaning that the CAT fund would not be pierced if that retention is not broken.”
The fund serves as a backstop for insurers in the event of widespread losses from a major storm. Currently, the fund has about $17 billion available.