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Date of Issue: October 05, 2006

Insurance frustrations, cancellations include agent Mixon

Insurance Pic
Mark Mixon, who has been in the insurance business for more than 30 years, favors federally backed hurricane insurance, additional flood insurance and an expanded wind pool to ease the growing insurance crisis. Islander Photo: Molly McCartney

Holmes Beach insurance agent Mark Mixon says he has lost an estimated 20 percent of his commercial insurance business this year because wind policies are simply unavailable for many of his customers.

"There is no wind coverage for my motels, for my resorts, nothing since February," Mixon said. So what are those small businesses doing if they can't get wind coverage?

"Either self-insuring or shutting their doors," he said.

Mixon's experience is one reflection of the insurance crisis now gripping Anna Maria Island, along with many other coastal areas in Florida. The struggle to find wind insurance at an affordable price has property owners - and their insurance agents - scrambling.

"I am totally frustrated," said Mixon.

Seated in his office, behind an executive-size desk covered with neat stacks of paper, Mixon described his major concerns in an interview with TheIslander. Based on what he has learned in his business, he sees a serious need for:

  • Expanded flood insurance. He said a homeowner can buy only $250,000 in federal flood coverage, and that isn't enough for them to rebuild their homes if they had serious storm damage.
  • Hurricane policies that would cover wind and flood damage.
  • Wind-pool boundary changes that would qualify all of the Anna Maria Island's property owners for coverage in Citizens Property Insurance Corp. if they couldn't get policies from standard companies.

Jim Mixon Insurance Inc. was founded by Mark Mixon's father more than a half century ago. Located at 5412 Marina Drive, Holmes Beach, the family business today is swamped with an increasing number of cancellations

"We are getting 3 to 4 (cancellations) a day, and that probably will go on through next year," Mark Mixon said.

Many of the cancellations reflect the withdrawal from this market of Auto-Owners Insurance, the Michigan-based company that until now has been one of this area's largest property insurers.

"Auto-Owners was one of the few standard companies that had stayed on the Island," Mixon said. "But now, due to all the insurance issues … they are dropping everybody within two miles of the coast."

One of the homeowners losing wind coverage from Auto-Owners is Mark. "I'm no different from anyone else," he said. "I was dropped after 30 years."

He is sending in a letter of complaint to the company. "I let them know I am not happy. I am sitting here, writing their business, and they canceled me."

Since his home is outside the wind zone, he expects to end up in Citizens.

 Mixon said concerns about wind insurance have overshadowed the need for additional flood insurance. He would like to see the federal program offer homeowners the chance to buy more than the $250,000 in coverage that is now available.

"Granted this wind insurance is out of control," he said. "But people have lost sight of the flood problem. There is going to be just as much devastation with a 10-foot-tall wall of water as there is with high wind. And water is a lot stronger than wind when it hits. See what the water did with Katrina."

As an insurance specialist, Mixon believes that one solution to the present crisis would be the creation of a special hurricane policy to cover both wind and flood damage.

Federal involvement would be essential, he said, "because I don't believe the state has the capacity to handle a major catastrophic situation."

State efforts to address the insurance crisis in recent years have produced the problem-plagued Citizens, the insurer of last resort for homeowners and, in some cases, for commercial owners.

"The state was never meant to be an insurance company," Mixon said, "but they have now grown to be the No. 1 insurer in the state."

Citizens has 1.2 million policyholders and is growing every day. Residential owners who lose their wind coverage are eligible for Citizens. The owner of commercial property located inside the state-designated wind zone can also qualify for Citizens.

The state-Anna Maria Island wind pool was established in 1986 and includes 1,000 feet of property starting at the Gulf shoreline.

Without access to Citizens, owners of commercial property located outside the wind zone are often hard pressed to find insurance. And if they do find coverage, it is likely to cost considerably more than Citizens, according to Mixon and other insurance experts.

Consider the Island Shopping Center, where Mixon's office is located.

Last year the shopping center paid about $25,000 for its insurance package, including wind coverage, Mixon said. The shopping center, which is owned by the Hugh Holmes Sr. and a partner, lost its insurance in February when the policy ran out and the insurer declined to renew the coverage.

Mixon said the shopping center does not qualify for Citizens because it is about 15 feet outside the wind pool. When he could not find any standard coverage for the shopping center, he was forced to go to the unlicensed surplus-lines market.

"We are now with Lloyd's of London and we are paying $125,000 for insurance," he said. The policy has a $20,000 deductible, compared to last year's $100 deductible.

"You have to understand," he said, "that the surplus-lines market is not regulated by the state."

 Even though he knew that, Mixon called the state insurance office to complain about the price he got from Lloyd's. He said the insurance office told him that if he wanted the insurance he would have to pay whatever Lloyd's wanted or it could be canceled.

The cost for the insurance coverage is passed to the shopping center tenants, who include more than a dozen small businesses such as Sand Dollar, the Island Florist, Home True Value Hardware and The Islander newspaper.

What price would the shopping center tenants pay for Citizens coverage, if the property qualified for Citizens insurance?

Only about a third of what they now pay Lloyd's of London, Mixon said. He estimates that the Citizens policy would "probably" be only about $45,000 to $50,000.


Pine store still without insurance

Pine Avenue General Store owner Sandy Mattick has been told she doesn't qualify for the new Florida Property and Casualty Joint Underwriting Association (PCJUA) wind insurance program because she lives in the back of her building.

"They won't insure me because mine is business and residential in the same building," she told The Islander.

Mattick doesn't qualify for coverage from Citizens because her store is located at 307 Pine Ave., Anna Maria, about a half-block from the wind-pool boundary. Citizens will only insure buildings between 97 and 216 Pine Ave.

Mattick and her store have been without wind coverage since July.