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Date of Issue: September 28, 2006

Insurance: 'They laughed when we asked for wind coverage'

insurance pic
Doctors, others, dare to go bare
The doctors and other professionals with offices in the Anna Maria Square building at 3909 E. Bay Drive, Holmes Beach, lost their wind insurance on Sept. 23. "The company told us they wanted to lower their risk for hurricanes," said Dr. Paul J. Barrese, pictured here outside the building. He said the premium for one of the new state wind policies on the $1 million building could be as much as $40,000. If that is the case, he said, "we will probably have to go bare." Islander Photo: Molly McCartney

The doctor's insurance has been canceled.

So has that of the lawyer, the accountant and the dentist.

They are the professionals who have their practices in the Anna Maria Square condominium office building at 3909 E. Bay Drive, across from the Publix Super Market in Holmes Beach. They provide medical and legal services for Anna Maria Island residents and businesses, and they have lost their wind insurance.

This is the latest example of the growing insurance crisis for Anna Maria Island residents and businesses.

"We're stuck in the same ball game as all the others," said Dr. Paul J. Barrese. "We've been dropped by our insurance company, as of Saturday, Sept. 23, and we're probably going to have to go bare - go without wind insurance."

Barrese, a board certified specialist in internal medicine, is the president of the building's condominium board. He owns two of the eight units in the building.

Other owners include Gy Yatros, who owns two units for his dental practice; Ben Cooper, an accountant; and Island Family Physicians, which includes doctors Stephen G. Pelham, Scott L. Kosfeld and Gloria J. Fischer. The unit owned by Fischer, who moved her practice to another location, is now rented to attorney Charles H. Webb.

Barrese said that wind insurance is a bigger problem for him than medical malpractice insurance.

Neither of the two Holmes Beach insurance agencies - Jim Mixon Insurance Inc. nor Oswald Trippe and Company Inc., both located in Holmes Beach - was able to help, he said.

"They laughed when we asked for wind coverage," he said.

He said he had checked with 23 other insurance companies and none of them would write a wind policy for the building.

Barrese's building is not eligible for wind insurance from Citizens Property Insurance Corporation, the state's insurer of last resort, because it is a commercial property located outside the state-designated wind zone for high-risk properties.

The building may qualify for the newly created state program operated by the Florida Property and Casualty Joint Underwriting Association (PCJUA), Barrese said. "We are waiting to find out."

But the PCJUA insurance, if it is available for the building, is probably unaffordable, Barrese said.

In discussions with agents at Dick-Johnson & Jefferson Inc. of Bradenton, he learned that the annual premium for PCJUA wind coverage for his building might be as high as $39,500.

Furthermore, he said, the policy would have a 5 percent deductible.

Barrese said he questioned the size of the premium he was quoted because the PCJUA coverage is supposed to be available to eligible property owners for $1.49 per $100 of covered value, with adjustments for building materials, distance from coast and so forth.

"The agent laughed at the idea that anyone would qualify for the $1.49 rate," he said.

Barrese said that a bigger deductible of 10 to 15 percent might reduce the premium slightly "but not enough to make any difference."

"I consider all of this highway robbery," he said. "And if it comes down to a premium of $20,000 to $40,000, we will go without wind coverage. We will just put that money into the bank. And pray.

"If the Big One ever hits, there wouldn't be an island and we would be out of business anyway, because we wouldn't have a patient or client base left. That would be swept away."

Barrese said there are mortgages on the building and the banks holding the mortgage may require that the owners carry wind insurance, regardless of premium cost.

In that case, he said, "we will have to work out something with the banks, and if the banks don't want to do that, we will have to pay off the mortgages."

He said his home is paid for and he could take out a mortgage on his house in order to pay off the mortgage on his office, if necessary.

"That isn't nice, but life deals certain blows and you have to deal with it."

What bothers Barrese is what he views as the failure of the state government so far to effectively resolve the insurance problem that he and others face.

"I don't feel like anyone up there cares," he said. "We are on an island and yet we are not considered to be in the wind zone?"

He says that simply isn't rational.

Barrese said the building, until now, has had wind, fire and liability policy with Auto-Owners Insurance Company.

"We've been with this same company since 1986," he said. "The reason they gave for dropping our wind coverage was that they are lowering their risk for hurricanes," he said.

Barrese said last year's premium for the building was about $4,500 and included general liability as well as liability for the board of directors and the usual wind, fire and hazard insurance. The policy had a $250 deductible.

"This year - and this really irks me - we are having to pay about $7,800 for liability, fire and hazard insurance, with a $2,500 deductible – and no wind coverage," he said.

 

Auto-owners needs time to research answers

John Lindauer, a spokesman for Auto-Owners Insurance Company, told TheIslander that he could not comment on the wind insurance cancellation for the Anna Maria Square building until he had time to do some research.

"But I can tell you that we always give 30-days notice before a cancellation," Lindauer said.

He said to e-mail The Islander's questions and he would try to respond later this week. The company, which is based in Lansing, Mich., has "helped people with their insurance needs" since 1916, according to its Web site at www.auto-owners.com.

The Web site says the company offers its insurance products in 25 states through 5,800 independent agents.

Mattick still awaiting answers, insurance

Pine Avenue General Store owner Sandy Mattick is still waiting to find out if her business is eligible for the state's new PCJUA wind insurance and what the premium would be if she qualifies.

She said her agent is working to get answers.

Mattick's store, located at 307 Pine Ave., Anna Maria, has been without wind coverage since July.

E-mail or mail your comments about insurance to state Rep. Bill Galvano at bill.galvano@myfloridahouse.gov to help him to continue building a record that can be used to develop solutions to the insurance crisis. His mailing address is 1023 Manatee Ave. W., Suite 715, Bradenton FL 34205.

The Islander wants to hear from you about your insurance problems and your ideas for solutions. E-mail news@islander.org or mail to 5404 Marina Drive, Holmes Beach FL 34217.