Florida Homeowners Reeling From Insurance Hikes

Quiet storm season, home insurance tug-of-war

RISMEDIA, December 1, 2006?(MCT)?Jim Fargo received the first nonrenewal letter from his insurance company in 2005. Then he was re-renewed. That is until last week, when he plucked another non-renewal letter from his mailbox. It has become a game of home insurance tug-of-war, but Fargo is ready to leave Allstate with the rope.

“There’s definitely something that’s gotta be done,” the Miramar Beach man said Tuesday. “The value of our homes has increased, no doubt about it and we do live in a hurricane-prone area, but there’s got to be some oversight here, somehow.”

Fargo is the new kind of hurricane victim. Roof damage was the extent of his loss in 2005, but the more devastating blow has been his insurance payment, which has more than tripled in the last three years.

Fargo is swept up in the growing trend that has big insurance companies passing along policy holders to newly formed companies, although that’s not always the case.

“The majority of what you’re hearing is people who cannot afford their insurance,” said Cliff Long, community outreach coordinator for the Florida Department of Financial Services.

It’s the effect created by a string of violent storms.

In 2004 and 2005, more than $451 million in claim payments were made in Okaloosa County. In Walton County, $168 million in claim payments were made, said Long.

Those claims have resulted in Category-4 type insurance rates for homeowners along the Gulf and Atlantic coasts from Texas to the upper East Coast.

In Mississippi, home insurance has gone up as much as 398 percent as of two months ago, Long said.

“We feel our pain but we’re not the only ones going through this,” Long said. “But when you wake up every day, you don’t read their paper, you read your paper.”

This year did not bring new hurricane damage.

“We actually expected an above average season,” said Randy McDaniel, Okaloosa County’s emergency management director. “… It gave us a break, which I think was a much needed break after the last couple of years.”

Could the inactive hurricane season, which quietly wrapped up, do anything to stem the tide in the insurance industry? It already has, if you ask Long.

“What (the hurricanes have) done is allow our local and national government to focus on a problem that had not previously been identified,” Long said. “This peaceful year has given us a chance to bandage our wounds and see what direction to go as a government and insurance industry.”

Gov. Jeb Bush formed the Property and Casualty Insurance Reform Committee in June to examine Florida’s insurance market and make recommendations to reduce the cost of insurance and increase its availability to homeowners.

Long also said this past year has given insurance companies a chance recoup some of their losses from the previous storms.

The unproductive hurricane season has been a year of rebuilding for the Navarre area that experienced major damage during hurricanes Ivan and Dennis.

“We had almost completed a lot of the work from Ivan when Dennis struck ten months later,” said Ira Mae Bruce, who has been a real estate agent in Navarre for 30 years

A total of $973 million in claim payments were made to policy holders in Santa Rosa County in 2004 and 2005, according to Long.

Several condos, such as the Pearl and Summer Winds, have reopened and the beach has been renourished.

The recent beach renourishment has actually left the landscape more gorgeous than before Ivan, said Bruce, who also sits on the Santa Rosa Tourist Development Council.

But the rebuilding effort has more than just another hurricane to fear. Bruce is counting on the Florida Legislature to remedy that.

“I’m confident that the Legislature is going to find a way to save Florida condominiums and homes,” she said.

Distributed by McClatchy-Tribune Business.