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PURE Enters State Seeking to Insure Upscale Homes

Minnesota Insurance - 07/10/12 
By Jack Meusey

Privilege Underwriters Reciprocal Exchange (PURE) has begun writing business in Minnesota as part of a gradual national expansion. The reciprocal, headquartered in White Plains, New York, has already signed on with several Twin Cities agencies. Its target market is houses with a replacement cost that starts at $750,000. The company, which started writing in 2007 in Florida and has expanded to offer coverage in 36 states, has increased its visibility by running commercials on CNBC, the cable network that caters to investors, and the U.S. Open golf tournament, which attracts an upscale audience.

The idea for PURE came from the belief of its three founders that leaders in the high-end market such as Chubb and Fireman’s Fund were underserving their clientele, explained President Ross Buchmueller, who previously worked for Chubb and Chartis. The founders believed that a company focusing exclusively on the high-end market— and starting fresh—could outperform competitors in price and service. For example, when PURE began writing in Florida five years ago it insured only relatively new homes with hurricane-protecting features. “Our premise is that we want to attract the best of the best,” Buchmueller explained. “We will avoid frivolous or frequent claims. And if we can further avoid big fire or water damage claims through our loss prevention efforts, the concept will work even better."

PURE offers a number of amenities such as a “Member Advocate” that will help insureds deal with the administrative side of claims. “For example,” Buchmueller said, “if you live in the Twin Cities it can be a hassle trying to deal with a claim involving a second residence in Naples, Florida. Member Advocates from our company, who function much like a concierge, will do much of that work.”

PURE is especially seeking insureds receptive to loss prevention, and willing to have a risk manager visit their homes. “The challenge to that, of course, is that many times a homeowner gets the recommendation but is too busy to follow through,” Buchmueller said. “Again, our Member Advocates make it very easy for the homeowner by doing such things as supplying names of suitable vendors to install the recommended safeguards, as well as providing the approximate cost.”

Another PURE distinction, Buchmueller said, is that the company looks deep into an application, which means it can often provide coverages that other insurers avoid. “For example,” he said. “A family with two drivers and three cars could raise a red flag for the typical insurance company that might suspect an attempt to hide a young driver. We will look at that application and realize the third car could be a classic or a fun car like a convertible that won’t be driven much, and price it accordingly.” Another distinctive feature is that PURE offers up to $50,000 in jewelry coverage under its homeowners policy, about 10 times the industry standard.

While PURE is licensed in 41 states with plans to enter more, Buchmueller said that Minnesota, along with Colorado, was among the most attractive because of the large number of residents with second homes. Another reason PURE is now here is that the state has been hard hit with homeowner losses in recent years. Several
years of consistently bad weather and relatively low premiums have made Minnesota an increasingly unprofitable market for insurers. In response, many companies have introduced rate increases, even for insureds that have not experienced claims, Buchmueller noted.

“It’s no surprise that homeowners are seeking more reasonably priced insurance options, particularly amid reports that Minnesota homeowners’ rates may rise more than 20 percent this year,” he said, “with PURE, homeowners have the opportunity to find personalized service and enhanced coverage, often at significant savings.”

Ed O’Connor is moving from PURE’s Northeast operations to the Twin Cities to become the company’s local representative. Among the agencies appointed by PURE so far are Marsh and Hays Companies in Minneapolis; PCG Agencies and Moores Insurance Management in St. Paul; Hornig Agency in St. Louis Park; Christensen Group in Minnetonka; A.J. Gallagher in Bloomington; and the Horizon Agency in Eden Prairie. Buchmueller said PURE  works best with agencies that feel comfortable committing to placing $250,000 in premium or greater in two years. “Equally important,” he said, “is that we are looking for agents that want to grow their business, not just move accounts. We want to provide real value for the agent from the PURE franchise.”

O’Connor can be reached at or (612) 293-4709. For more information, visit