Long Island Business News - 03/02/09
By Laura Glasser
While large insurers continue to unload Long Island homeowners policies, one company is actually entering the market.
PURE, or Privilege Underwriters Reciprocal Exchange, a White Plains-based mutual insurance firm, has started writing policies in New York and said it's eager to cover homes on the Island.
And unlike big names like Allstate and Liberty Mutual, who have been running from the region since Hurricane Katrina, PURE caters to high-net-worth and coastal properties.
"The insurance companies who are reluctant to add to their exposure aren't opposed to insuring people along the coast, they just did too much over time," said Ross Buchmueller, chief executive of PURE. "This is the advantage of being new - you can add policy holders who fit a well-defined target."
Insurers with significant exposure on the Island's coastline have either quit writing new policies locally or started dropping local homeowners in fear a major storm would wipe them out financially. As a result, many Islanders have struggled to find affordable coverage or any coverage at all for their homes.
Buchmueller said PURE can afford to go against the grain because it's a new company, launching in 2007, and has no exposure on the Island at all.
"If we carefully select our members and avoid writing too many, we think we'll hold up very well in the event a hurricane hit," he said, adding PURE will write "thousands of policies on Long Island, not tens of thousands."
One of the major benefits for Islanders is PURE's voluntary hurricane deductible. Most insurers require homeowners pay a portion of recovery costs in the event of a hurricane, but PURE customers can opt out of the deductible in exchange for a higher premium.
On the other had, homeowners can choose a higher deductible and pay a lower premium.
"Right now there's very little choice, insurance companies mandate what your deductible is," Buchmueller said. "We offer flexibility."
PURE will only insure homes that cost over $1 million to restore because, Buchmueller said, there's evidence those larger homes hold up better in a hurricane.
The company will soon start writing policies in New Jersey and Connecticut and is working through state regulations to start insuring homes in Alabama.