Connecticut Post, The News-Times, Greenwich Time, The Advocate - 10/13/09 By Rob Varnon
Wealthy residents, especially those on the coast, finally are seeing some competition for their homeowners insurance business as a White Plains, N.Y.-based company now is offering policies in Connecticut.
The Connecticut Insurance Department said last week that Privilege Underwriters Reciprocal Exchange, or PURE, has registered to provide casualty policies for homes, autos, boats and other personal property.
"Their rates were run and found to be competitive," said Dawn McDaniel, a spokeswoman for the Connecticut Insurance Department.
Although McDaniel noted that income and home value were not listed as preclusionary items in PURE's filing, the insurer is focusing on homes that carry an expensive rebuild price tag, and there's a reason for that, according to local insurance executive Jeff Rubin.
"We work with and for your high-net-worth individual," said Rubin, senior vice president of Fairfield-based Hub International Northeast Ltd. "Really, only a handful of insurance companies do the job."
Rubin's firm has been offering PURE policies in other states and recently started offering them in Connecticut. He said an owner with an expensive home can pay from $10,000 to $100,000 for insurance coverage in a year. And although the typical Connecticut homeowner can go out in the market and get "50 insurance companies willing to work a quote on his home . . . a wealthy individual might have three," he said.
There are fewer options for homeowners insurance the closer you get to the coast, Rubin said, where firms try to avoid writing policies because of the risk of storm damage.
"Along the coast, many, many insurance companies are getting out of the market," he said. "They are trying to get homes off their books."
Rubin said that's where PURE is helping to fill a market void. Rubin noted the problem finding homeowners insurance in Connecticut is not limited to the wealthy. He said there is rising concern over the number of hurricanes and named storms that may hit New York, New Jersey and Connecticut.
Rubin said PURE writes its policies based on individual risk assessment of a property and not on its overall market exposure, as some firms do.
PURE Chief Executive and President Ross Buchmueller said assessing and serving the individual remains a core part of the insurer's business model.
Buchmueller founded PURE in 2006 and has grown the business steadily up the East Coast from Florida. He has more than 20 years in the business, including 12 with the Chubb Group, one of the largest insurers of high-value homes in the area.
Buchmueller said one reason he's focused on high-net-worth individuals and families is because that's where his experience is.
"I don't know anything else," he said, adding he built AIG's Private Client Group before starting PURE.
High-net-worth individuals have a lot of special needs, he said.
"They often have more cars than drivers, and traditional automobile insurers, when they see more cars than drivers, think there are some teens they're not being told about," said Buchmueller, as an example of his clients' needs.
PURE also offers an advocacy service that helps the insured find builders when they have to rebuild, he said. He also said other insurers charge too much to cover fine jewelry.
Buchmueller said he believes he also has an advantage over some insurers because PURE is a private company that uses a mutual-holding company model, meaning the policy holders own it. And although he said he's only interested in high-net-worth clients, Buchmueller predicts there will be new companies arising to fill the needs of less wealthy homeowners because of market demand.
"I think there will be more and more specialists," he said.
Buchmueller said people should compare coverages and understand what the policy covers. He said there is a difference between insuring the home for its actual cash value versus for what it costs to rebuild, or its replacement value. It's the same kind of recommendation the state insurance department makes on its Web site.
For more information on buying insurance, visit www.ct.gov/cid