By Cindy Lane
sun staff writer
As experts study the massive new state
property insurance law, it appears that insurance may
be more accessible for Anna Maria Island business owners,
but not necessarily more affordable.
One of the dozens of provisions in the insurance reform
law signed by Gov. Charlie Crist last week requires Citizens
Property Insurance Corp. to provide insurance coverage
to commercial property owners who previously could not
get insurance due to their location inside a wind zone.
Island business owners in the Property and Casualty Joint
Underwriting Association, created last year for such stranded
commercial property owners, will be transferred to Citizens
under the new law.
"Its certainly a change from the direction
weve been going," state Rep. Bill Galvano said,
adding that while the law does not refer specifically
to wind zones, nothing in it limits or denies Citizens
insurance coverage based on a propertys location.
The attorney interprets that to mean that the new
law requires Citizens to insure property anywhere in the
state, regardless of its location inside or outside of
a wind zone.
But the wording of the law was revised so hastily in a
marathon seven-day special session, that may not be what
it actually says, said John Laurie of Wyman Green and
Blalock Insurance in Bradenton, who serves on the states
Property and Casualty Insurance Reform Committee. The
committee advises the Legislature on insurance.
While Laurie is working to get clarification on the accessibility
issue, he said it may wind up to be a moot point for commercial
property owners inside the wind zone because the law doesnt
mandate maximum rates.
"It may be that they qualify, but it may not be affordable,"
Another problem with the law is that if everyone is able
to get insurance through Citizens, more business will
go to the state-run insurance company, increasing the
"The state is us," Laurie said,
explaining that the taxpayers of Florida would ultimately
have to pay should a Hurricane Katrina or a series of
smaller storms hit Florida.
Another downside of the new law is that Citizens is competing
with other insurers on an unlevel playing field, which
may discourage companies from doing business in Florida,
Citizens rates are not based on actuarial science,
Laurie said, explaining that unlike other insurers, who
must buy reinsurance and price their rates according to
100-year storm risks, Citizens bases premiums only on
50-year storm risks.
"Im hoping companies dont fold up their
tents and go home," he said. "You cant
mandate the laws of business."
The committee will advise the Legislature on insurance
through its regular session, beginning in March, when
further changes to the law are expected to be made.
Ultimately, the insurance industry would like to see Citizens
become a reinsurer rather than a direct insurer, he said.
"But the market is too chaotic now," he said.
"That may take a few years."