New Property-Casualty Insurer Targets the Wealthy
February 21, 2007
Naples Daily News - 03/22/07
By Laura Layden
Then a new property-casualty insurer in Florida might be just what you need. Its mission is pure and simple: It sells insurance only to those with expensive homes, cars, jewelry and art.
The company is called PURE Risk Management. And where better to sell the new insurance than in Naples, where Gulf-front mansions sell for upward of $14 million and Porsches, Bentleys and Rolls-Royces rule the road?
PURE’s CEO, Ross Buchmueller, is in Naples this week to pitch his new insurance, designed exclusively for owners of million-dollar-plus homes in Florida and households with more cars than drivers.
“The customer we are serving is the person who owns a home insured for more than $1 million,” he said. “Certainly in Naples, Marco Island and some of the other places nearby, there are quite a number of eligible clients.”
Make that thousands of eligible clients in Collier County alone.
A little more than a dozen people attended a seminar Wednesday, many of them real estate agents selling luxury homes.
A second seminar is planned for today at the offices of Gulfshore Insurance Inc., off Goodlette-Frank Road. The Naples company is one of a few agents selling the new insurance statewide.
“What we feel as an insurance broker is that choice is hard to find,” said Brad Havemeier, Gulfshore’s president. “There’s still a crisis of insurance availability and choice.”
PURE is offering a new choice as other carriers are pulling out of Florida or dropping policyholders in the aftermath of the costly hurricanes in 2004 and 2005.
“There are a lot of companies now that are saying no matter how much you pay we don’t want your business,” Havemeier said.
He said his company can offer wealthy clients other options, but they are limited.
The local seminars are a first for PURE. Depending on how they go, the company may do more elsewhere in the state, Buchmueller said.
As a result of changes Florida legislators made in 2005, thousands of wealthy residents stand to lose their homeowner policies with state-run Citizens Property Insurance Corp., Florida’s largest property insurer, next year.
Homeowners whose property and belongings are valued at $1 million or more will no longer be eligible for Citizens’ program for high-risk accounts. They can reapply for coverage if they’re declined by one state-authorized carrier, and three surplus lines carriers, which are unregulated.
“If people are with Citizens, we are trying to make sure they know this law was passed,” Buchmueller said.
The change will affect 7,000 coastal residents in Florida who rely on Citizens’ high-risk account for their hurricane coverage, he said.
“A lot of people have not been acting either hopeful that the law will change again, or in the case of a lot of insurance agents they don’t have an alternative for their clients,” Buchmueller said. “So they simply don’t tell them they are going to be in trouble next year.”
Locally, the new law is expected to affect 1,000 policyholders, Havemeier said.
PURE expects to get most of its clients from Citizens and surplus lines carriers, which as unregulated companies don’t have to meet Florida’s rate caps and often charge much higher premiums.
PURE promises to save its customers 40 to 50 percent on their homeowner premiums. The company can offer the savings because it only insures large, well-built homes that meet the more stringent 2001 Florida building codes, and it’s a specialized company that’s owned by policy holders, Buchmueller said.
“We are very strict about who qualifies,” he said.
Members pay a onetime fee equal to 50 percent of their premiums the first year for their homeowners insurance, and 20 percent of their first-year premiums for coverage of their luxury belongings, such as automobiles, jewelry and art.
At the end of every year, the company will return any savings after losses and expenses to its policyholders.
Homeowners with PURE policies have the option of adding flood insurance. The company offers separate policies for jewelry, art and other luxuries.
Since introducing the new insurance two months ago, PURE has attracted a lot of attention. The company has received more than 1,000 applications.
“We have probably just under 100 members already who have applied, we’ve accepted and they’ve signed up,” Buchmueller said.
He said “a bunch” of those members are local residents.
This year the company is offering 2,500 memberships for homeowners policies. It is limiting the number of memberships in each county.
Once it reaches 400 members in any one county, it will pause and then consider whether to issue more policies, Buchmueller said.
Seminar attendees Wednesday had some pointed questions for Buchmueller. One asked whether policyholders would be canceled. To that, he said it was a possibility, but that it was less likely than with other carriers.
One homeowner said he got a quote from PURE and it didn’t differ much from the rate he’s been paying with another company.
The savings depend on the carrier you are with, Buchmueller said.
The insurance isn’t for everyone.