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Date of Issue: May 04, 2006

Legislature blows ill wind at Island insurance plan

Thanks to the Florida Legislature, some Island business owners are now scrambling for wind insurance coverage, and some are even considering closing their doors for good.

A bill proposed by State Rep. Bill Galvano to include all of Anna Maria Island within the state's wind zone coverage area was recently defeated in the legislature, despite the fact that all of Sarasota, from Siesta Key to I-75, is considered a high hazard wind zone and eligible for a wind insurance policy from the state-run Citizens Property Insurance Corp.

Without a change to the law, businesses and homeowners not within 1,000 feet of the Anna Maria Island coastline along the Gulf of Mexico are considered outside the velocity zone and can't get a Citizens policy. Those owners have to look for a private insurance company with much higher rates for coverage.

That's proved a daunting task and long-time Anna Maria businesswoman Lois Finley of the popular Mama Lo's eatery in the Bayview Plaza is considering closing the business. She and other business owners in the plaza have been trying to purchase their individual units, but have been unable to obtain a mortgage because they can't get wind insurance.

The net result is that insurance and taxes have been skyrocketing and shopping center owners have been passing on their increased costs to their tenants.

Business owners in the Island Shopping Center in Holmes Beach were hit last week with a $300 a month increase in their rent because of the high cost of wind insurance.

"It's killing all the businesses," said one owner who asked not to be identified. "I'm paying $300 more a month just for wind insurance. I now have to have $300 more a month in sales or raise my prices. It's enough to make me consider closing the store," he said.

Several other business owners in the Island Shopping Center indicated they might close or move their business elsewhere if rent and insurance premiums continue to climb.

The current law is inequitable, Christiaan Huth of Oswald Trippe Insurance in Holmes Beach has said previously, particularly when most of Sarasota can get wind coverage from Citizens, saving taxpayers in that politically connected city millions of dollars in insurance premiums annually.

Huth handles several companies that sell private wind insurance policies, but obtaining such a policy outside the V-zone is often difficult and generally very expensive for the business owner.

For example, Huth recently wrote a homeowner's insurance policy for a Gulffront home. Not including the wind policy, the homeowner's annual insurance premium amounted to $700, while Citizens stepped in with $2,300 in wind insurance for a total annual premium of $3,000.

"That same home in Key Royale in Holmes Beach would have to pay about $4,500 for property and wind insurance," said Huth, because it's outside the V-zone.

If that sounds high, consider the case of one Island resident who purchased a $1 million house, then found it was 100 feet outside the zone. The wind policy from a private insurance company came in at $17,000 a year, while the homeowner's insurance premium is around $1,500 annually.

Efforts to reach Galvano for comment on whether or not he'll bring forth another wind insurance amendment during the current legislative session were unsuccessful. With the Legislature due to adjourn May 5, however, it's unlikely Anna Maria business owners on the wrong side of the 1,000-foot line from the coast will get any insurance relief this year.