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Insurer pulls plug on policies
By JEFF HARRINGTON, Times Staff Writer A growing number of waterfront homeowners and business owners are being dumped by their property insurer with the start of hurricane season less than a month away. Nationwide Insurance is the latest of a scattering of Florida insurers to "non-renew" its hurricane-prone properties. In current mailings to Pinellas County policyholders, Nationwide said it is dropping coverage of businesses that have frame construction and houses that are within 1,000 feet of water. Andy Martinez, a Nationwide spokesman in Tallahassee, said the number of affected customers is in the hundreds or low thousands, but he could not be more precise. "It's something we really tried to avoid," he said, adding that rating agencies such as AM Best were pushing his company to limit its exposure to risk in Florida. USAA, Travelers/First Floridian and Ohio Casualty also have pulled back on coastal coverage this year. The common trigger for all of them was the end of a state-imposed moratorium that had prohibited the insurers from dropping more than 5 percent of their total policies in Florida or more than 10 percent in one county in any given year. The consumer-friendly moratorium, which ended last year, was an outgrowth of 1992's Hurricane Andrew. The hurricane's destructive fury put some insurers out of business and convinced others to pull out of Florida altogether. Those that remained had to agree to the moratorium in order to write policies inland. As tough as the timing is for those losing coverage, it could have been worse. First Floridian informed the state it was dropping 20,000 coastal policies last July after the hurricane season was under way. Tami Torres, of the Florida Department of Insurance, said insurers do not have to notify the state of non-renewals. She said there is little the Insurance Department can do to stop the companies if they give a valid reason for the pullback, such as limiting exposure. So far, the impact of the non-renewals has been restrained. The state-run Joint Underwriting Association insures homeowners who cannot find coverage in the open market. It has grown to just over 100,000 policies, up from about 70,000 a year ago. The state windstorm pool, which provides windstorm coverage to those who cannot find it on the open market, has been hovering below a half-million policies throughout the year. "The increase in the JUA and the wind pool are still modest . . . I don't think we're talking about large numbers," said Sam Miller of the Florida Insurance Council. Certainly, he said, the impact is nowhere near the post-Hurricane Andrew scare, when nearly a million homeowners were forced into the JUA. Under state law, rates in the JUA have to be higher than the open market as an incentive for policyholders to find coverage elsewhere if they can. -- Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.
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From the Times Business report
From the AP
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