Welcome to Money for the Rest of us. This is a personal finance show on money, how it works,

how to invest it, and how to live without worrying about it. I'm your host, David Stein. Today is

Episode 549. It's titled, Why Catastrophe Bonds are yielding 12%? And should you invest? Recently,

Lepril and I were visiting family in Miami and Naples, Florida.

We hadn't been there in eight years.

We spent some time staying on Miami Beach, and it rained the first four days we were there

as a front stalled over the Atlantic coast, and moisture just kept coming in. Now, rain's not unusual in

Miami. They get upwards of 60 inches per year. Now, being in Florida, we know there's hurricanes,

and I was curious, well, how many serious hurricanes has Florida had that hit landfall over the past 25 years?

And I found a database from Noah and there's around 14 storms.

Now, Florida is big, and so there has not really been a direct hit to Miami over those 25 years.

Miami gets lots of rain, but one thing that has changed is the intensity of the storms, and it's been that way in many places around the world.

As the planet warms, clouds hold more water, and that leads to what the insurance industry calls severe convective storms.

These are non-peak perils in insurance nomenclature. A peak peril would be something really,

really big like an earthquake. Non-peak peril would be something more localized like a severe convective storm.

And Florida and Miami has been getting more of those.

In 2024, a foot and a half of water fell across South Florida.

And this wasn't associated with a hurricane or tropical storm.

It was just a rainstorm.

And meteorologists would classify something like that severe as once in a 200-year event.

Yet that was the fourth year in a row.

There had been that level of massive storm in Florida.

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