It didn't take long for the ramifications to reach Bogie Winstead Insurance in Largo after American Superior Insurance became the first hurricane-swamped insurer in Florida to be taken over by state regulators.
Bogie Winstead, which has written homeowners' policies on behalf of American Superior, was hit by a dozen calls from upset policyholders Thursday morning. Heather Fisher, who works at the agency, assured callers the state's intercession means all claims will be paid and no policyholders will be dropped.
But she acknowledged some uncertainty.
"It's kind of limbo. We don't know if they're going to reopen (to write policies again)," Fisher said. "They've been closed for new business . . . since prior to Hurricane Frances."
As the St. Petersburg Times reported Thursday, the state swept in Wednesday afternoon to take control of American Superior's operations as receiver after the company said it was unable to handle the volume of claims from Florida's four-hurricane season. American's biggest exposure is in the Panhandle, where it was overwhelmed with Hurricane Ivan claims.
Initially state regulators said that the company did not have any policies in the Tampa Bay area. On Thursday, they retracted that, saying roughly 5,000 of American's 60,000 Florida policies are in the bay area.
At least a smattering of local policyholders have put in claims from the recent storms. A state list that detailed most of the pending 7,000 American claims showed 40 in Pinellas County, five in Citrus County and three in Pasco County.
Area policyholders reacted to news of the receivership with a combination of fear and confusion.
"I just sent them my payment yesterday and I'm wondering if they're going to go under, should I cancel that?" said Joan Bailey, 80, of St. Petersburg.
Some said they weren't surprised.
Don Smith, a real estate investor in St. Petersburg, has long questioned the company's competence. An American Superior policyholder for four years, Smith said the company has repeatedly sent renewal notices and other paperwork rife with errors: pages missing; names misspelled; documents rendered illegible by shoddy printing.
"I'm glad I never had a claim with them because any time I've had correspondence with them, they've messed it up," Smith said.
Karen Liniewicz of St. Petersburg also questioned the company's accounting controls. After sending in her premium check in July, and the check clearing Aug. 5, she received another request for payment last week - the Saturday before Hurricane Jeanne struck.
Robert Hogan, a retired carpenter and cabinetmaker living in Clearwater, said his premiums under American had jumped from $758 in 2003 to $911 last summer. "How in the world can they be broke when they increased their rates so fast?" he wondered.
American Superior, which is based in Plantation, has "plenty of cash" on hand but turned to the state because its call centers were overwhelmed, company president Pat Gallagher said Thursday.
"Our telephone system was a little antiquated and we weren't prepared for the volume of four hurricanes," Gallagher said.
Adding to the stress, the company only has enough in-house adjusters to handle a normal claim year. "We have agreements with (outside adjusters to help) with catastrophe situations but so does every other company and we have very little leverage," he said. "The state, on the other hand, has a lot of leverage."
Gallagher said he could not guarantee the company will have enough money to stay in business after paying claims. If finances deteriorate and the company liquidates, claims would be paid out of the Florida Insurance Guaranty Association.
Regarding questions of competence and dual billing, Gallagher said the company converted to a new computer system this year and has had "some minor issues but they've been resolved."
Bob Lotane, a spokesman for the Florida Department of Financial Services, said American has long had problems but showed signs of reviving since Gallagher took over as president in October. "The guy was turning the company around big-time," Lotane said. "It's a shame this happened."
Indeed, the beleaguered insurer is not without its fans.
Lucy Peak, who has two investment properties in Oldsmar insured by American, put in two small claims for less than $2,000 apiece last year. "I was afraid they would cancel me when my renewal would come in and I was not," she said, adding that her claims were handled quickly and fairly. "I'm really happy with them."
