Cranston Herald - 03/09/10
By Russell J. Moore
Portsmouth resident David Fleury, who owns a $1.4 million home about a half mile from the Sakonnet River, received jaw-dropping news from his former home insurance provider last year.
AIG, the company that provided his insurance policy, notified him that due to storms and hurricanes over the last several years in Florida, Texas, and most infamously, Louisiana, the company, like many others, was forced into a position to rethink its ability to pay for major disasters. That meant the embattled company would have to increase its premiums in Fleury's case, and in others, drop the coverage for homeowners all together. The situation was not unusual for other insurance companies providing coverage throughout the area and region.
In some cases, the coverage zone for increased charges for risk due to hurricane was extended to as far away as one mile from the shore.
Without giving the exact cost specifics, Fleury estimated the policy would cost him about 40 percent more than he had paid in previous years.
But Fleury was lucky. His agent shopped around, and before he knew it, found PURE Insurance (Privilege Underwriters Reciprocal Exchange), a member-owned reciprocal insurer, to offer comprehensive, customized property and casualty insurance coverage to responsible owners of well-built, high value homes in Rhode Island. Typically, PURE considers coverage for homes, and business-owned buildings, worth more than $750,000.
Amica Insurance, which offers auto insurance, is an example of a member-owned company located in Rhode Island. PURE isn't located in Rhode Island, but customers can purchase insurance by contacting one of two agencies in the state - Starkweather & Shepley Insurance Brokerage, Inc., based in East Providence, and Middletown-based Carey Richmond & Viking; both offer PURE policies.
That's exactly what Fleury did. And PURE was able to save Fleury approximately 30 percent on his homeowner's premium by switching from AIG to PURE. Executives from PURE say Fleury's story isn't the least bit uncommon. Since PURE began writing policies in 2007, the company claims that its members have reported average savings of more than $3,200 on their annual insurance costs.
"Simply put, Rhode Islanders have been paying too much for their homeowners insurance. We intend to change that," said Martin Hartley, PURE's Chief Operating Officer, during a telephone interview on Tuesday.
As Hartley pointed out, PURE is new to the Rhode Island market. Because the company is 100 percent member-owned, it doesn't need to show profits to stockholders, which company leaders say drives premiums for customers down.
Members pay a surplus contribution of 10 percent of their high value homeowner's and watercraft premiums and 4 percent of their premium for all other policies for each of the first five years of membership. If those surplus contributions exceed costs, the money is given back to the policyholder.
"We're committed to credit back to the policyholders any extra money the company collects," said Hartley.
"Within our competitive market, there are really no other member-owned companies like us."
In a press release, Don Curran, senior vice president of Starkweather & Shepley, said his company was proud to offer PURE's services.
"We welcome PURE to Rhode Island and look forward to the opportunity to work with a specialty provider committed exclusively to the high net worth market. We are confident the owners of high value homes in Rhode Island will appreciate the significant savings, customized coverage and superior service PURE provides."