Hurricane Matthew to test wind, flood insurance in Florida and beyond

Rain batters homes as the eye of Hurricane Matthew passes Daytona Beach, Florida, U.S. October 7, 2016. REUTERS/Phelan Ebenhack/File Photo

WASHINGTON (Reuters) - Hurricane Matthew, churning off the Florida coast, could present two major tests for the U.S. insurance industry - one for an unusual wind coverage market formed in recent years in Florida, and another for the troubled U.S. flood insurance programme.

In an era of rising seas, catastrophic damage from Matthew would likely revive questions about the extent to which American taxpayers should subsidize insurance for coastal communities, an issue that Washington has not adequately tackled, insurance industry experts said on Friday.