Quest for insurance must wait till storm passes

Times staff writers

© St. Petersburg Times, published September 25, 1998

hen hurricanes and tropical storms threaten, it can be tough to buy a house.

Unless you secured homeowners' insurance for your new house well before the storm threatened, you won't be able to get it until the storm is long-gone. Without insurance, mortgage companies won't give loans. And without loans, most house deals won't close.

More coverage from the Times on our Georges site.

Insurers differ on when they stop issuing new home insurance. State Farm Insurance Co. and Allstate Insurance Co. stop writing policies when a hurricane watch or warning is posted in the county where the storm is located. They tend to start writing policies again 48 hours after the storm leaves.

But the two home insurers of last resort -- the Florida Joint Underwriters Association and the Florida Windstorm Underwriting Association -- have much stricter policies.

They stop writing insurance policies when tropical storms or hurricanes are in a large geographical box that stretches south from Wilmington, N.C., to Guatemala and west from the Dominican Republic to Galveston, Texas.

Home buyers can get around the rules by buying their policies in advance, when no storms threaten.
-- Teresa Burney

With Hurricane Georges threatening Florida, Insurance Commissioner Bill Nelson said the insurance industry is ready to meet the challenge.

"I can tell you it is very, very stable," he said.

The state's catastrophe fund is bulked up with $2.5-billion in cash and bonding authority to raise $8.5-billion more. Insurers have better spread the risk.

And the state and insurance agents are ready to test a new cooperative plan that gives insurers quick access to damaged sites.

"What we have learned from Andrew is the chaos (caused) after insurance adjusters couldn't get in," he said. All insurance adjusters are being issued passes.

After Hurricane Andrew, 10 insurers went out of business and two nationally-affiliated subsidiaries had to be bailed out by their parent company.

Nelson doesn't see that happening again.

"We're going to see the financial stability test. I think they're going to pass that test."

The department will dispatch some of its 1,600 employees statewide to affected areas.

Holding up a T-shirt saying "Relief Team," Nelson showed how strike force members would be identified at a disaster scene.

"In the chaos of a hurricane, people are confused," he said. "They're frightened. And they need our help."
-- Jeff Harrington