Insurance crunch hurts clients

Daytona Beach News Journal, 1/2/2008

Some small companies will cover ‘rejects,’ but it’s tough to find them

By THOMAS S. BROWN
Business Writer

DAYTONA BEACH — While insurance giants grow increasingly picky about which homes they’ll cover in Volusia and Flagler counties, a few startup companies have been taking some of the rejects.
But finding out exactly which company will issue policies for a particular county can be a headache, says Michael J. Lechter, a Lake Worth-based entrepreneur who has begun selling an online guide to the insurance maze.
"Some companies will say they’re selling insurance, but their Web site won’t tell you how to find their agents," he said. "You can waste hours on the telephone trying to get quotes."
Homeowner Allen Walker already has begun researching insurance rates even though he may not need the information for a year. He started looking after an agent tipped him that his Port Orange home a half-mile west of U.S. 1 may lose coverage in 2009.
"I don’t want to wait until the last minute when a hurricane is coming in," he said. "Then no one will want to insure you."
The Florida Office of Insurance Regulation paints a bright picture of insurance availability and pricing since passage last year of an insurance overhaul law pushed by Gov. Charlie Crist.
"We’ve had 20 new companies approved to sell insurance in Florida during 2007," said Ed Domansky, spokesman for the office.
Lechter, however, said the big picture is not that rosy. Out of 437 insurance companies licensed to issue homeowner policies in Florida, only 33 have been writing new business in recent months, he said. The law was supposed to make Florida more attractive by offering insurance more low-priced, state-backed reinsurance, reducing their risk. But few big players have responded. Instead, State Farm, Allstate, Hartford, Nationwide and Auto Owners all have begun trimming coverage here, mainly east of Interstate 95.
Last year, the state insurance office created a free Web site, shopandcomparerates.com, that was supposed to help homeowners find affordable insurance rates within each county. Lechter contends its information is fragmentary and unreliable.
Lechter’s Web site, Homeinsurancebuyers.org, charges $20 for a two-week subscription. It doesn’t offer rate information, but it does list underwriting guidelines, such as "Company X is not issuing policies for homes built before 1990." It also rates companies according to their financial strength and customer service records, he said.