Insurance: New wind-only commercial program launches this week
Two big events are scheduled for Anna Maria Island this week.
One is the opening of the hurricane season on Friday.
The other is the promised launching of the new wind-only commercial insurance program and the erasure of the line that formerly designated the wind pool.
The wind insurance, which is being offered by Citizens Property Insurance Corp., the state's insurer of last resort, was supposed to have started May 20.
But the kickoff date was delayed due to changes in the proposed rates and policy language required by the Florida Office of Insurance Regulation, according to Citizens spokesman Rocky Scott.
"We just completed those changes and got their approval," Scott said on Friday. As a result, Citizens hopes to begin issuing policies this week, possibly as early as Tuesday, May 29.
"We're double-checking software to make sure it's up to speed," Scott said. He said agents are being briefed on the program via e-mail bulletins and telephone calls.
The coverage would be effective beginning Friday, June 1.
In the past, the only commercial properties eligible for Citizens wind insurance were those located within the state wind pool. The effect of that system was to split the commercial businesses on Anna Maria Island into two groups: those eligible for Citizens wind coverage because they were in the wind pool, which covered the first 1,000 feet landward from the Gulf shoreline, and those which didn't qualify because they were "over the line."
This difference added up to thousands of dollars in additional insurance premiums for those commercial operations outside the wind pool.
But under a new state law approved in January during the special legislative session on insurance, Citizens is now allowed to offer wind-only policies to property owners, regardless of their location, when those owners cannot find affordable coverage on the private market.
Among the supporters of this legislation was State Rep. Bill Galvano (R-68), who represents Anna Maria Island and other parts of western Manatee County. Galvano declared the passage of this portion of the new law a "big win" for Anna Maria Island and the many small businesses that have been hard hit by soaring insurance premiums.
Now some relief appears to be in sight.
That is welcome news for Holmes Beach insurance agent Mark Mixon of the Jim Mixon Insurance Inc. He has been under pressure from his commercial customers to help them get the new coverage.
"The state has been giving us a different story every day," Mixon said. "What is taking them so long? We have heard of red tape, but this is ridiculous."
Mixon said he had taken steps to apply for the new coverage for some of his customers even though he was still waiting for Citizens to provide final details on rates and coverage.
He said he knew enough about the new program to conclude that the Citizens policies would save money for his commercial property owners, including the Island Shopping Center, which houses more than a dozen small businesses, including The Islander newspaper.
The shopping center, owned by Hugh Holmes Sr. and a partner, has been paying Lloyd's of London about $139,000 a year for wind coverage. Lloyd's of London is an unregulated surplus lines carrier with higher rates than state-regulated insurers.
Mixon said he has been calling the underwriters at Citizens several times a day to get as much information as possible about the new program.
"I know it is going to cost less money than people have been paying," he said.
How much less is not clear, since Citizens has not clarified its rates. And the final premium for any structure will ultimately depend on the kind of construction, the age and the distance from water.
Agents at the Oswald Trippe and Company insurance office also are waiting for Citizens to finalize the details for the new wind-only commercial policies, according to agent Christiaan Huth.
"People are looking for it to become available," he said.
In an effort to provide basic details about the program, Citizens has posted a series of questions and answers on its Web site at www.citizensfla.com under a link entitled "new commercial wind-only program."
According to spokesman Scott, the wind-only policies for commercial/non-residential property owners are for a three-month period, from June 1 through Aug. 31. On Sept. 1, the wind-only policies will be switched to multi-peril policies, Scott said.
"We don't have any idea about the demand yet," Scott said, "but we expect it to be sizeable because of the feedback we've gotten from the private sector about the lack of commercial/non-residential policies across the state."