Company Will Write Policies On Million-Dollar Properties
May 13, 2007
The Reporter - 06/14/07 By Erin Ehrlich
A Florida insurance company is looking to pick up some business in the Keys at a time when other insurance companies are fleeing the market.
Privilege Underwriters Reciprocal Exchange, or PURE, was permitted in January of this year to enter Florida's insurance market and cater to those homes considered "high risk" for windstorm damage due to coastal placement.
Many of the new policies started by PURE will come from Citizens Property Insurance Corp., the state-run insurer of last resort, which currently insures an estimated 411,500 high-risk homes, according to its Web site. PURE is a Florida insurance company that provides coverage for large, well-built homes worth more than $1 million that have sufficient elevation and sturdiness, said the company's President and Chief Executive Officer Ross Buchmueller.
Buchmueller said although the move seems risky, history has shown that large, well-built homes are less vulnerable to wind damage from hurricanes.
But if wind or water was to damage a home PURE insured, he said full coverage would be provided without any hesitation, adding that reinsurance for the company is what he calls "exceptional." Michael Todorovich, whose company, Angelfish Risk Management Corp. is PURE's agent in Monroe County, said Citizens is more than happy to release these policies, penalty-free, to companies such as PURE and AIG.
He said Citizens will refund any unused premium to a policyholder who changes insurance companies.
Representatives from Citizens were not available for comment.
Todorovich said Monroe County is an unusual position because, as a "bullseye" for hurricanes, no insurance company wants to take the risk and sell policies.
Therefore, residents are stuck with whatever the state can provide, he said.
Although Buchmueller said in a phone interview that PURE is going to expand, he said it is not looking to grow exponentially, but rather approach Monroe County with a "slow, steady growth."
"I don't want to mislead people that this is for everybody," he said.
"It's a market where we'd be eager to serve, but just with the discipline to select the members."
PURE is serving about five counties and is limiting the number of policies to about 500 each, Todorovich said.
"It's like a club," he said, adding that many people are anxious to join.
Todorovich and Buchmueller also said that because PURE is a reciprocal exchange, meaning it's owned by policyholders as opposed to shareholders, profits from the company are put into a savings account that policyholders, should they choose to drop PURE's coverage, can collect.
"Books are open to members so they see where every penny goes," Buchmueller said. "It's not only transparent, but it is truly run for their benefit."
Todorovich also said they are beneficial by helping to reduce premium rates in the future.
"It's a step towards trying to bring solutions to Monroe," Buchmueller said.