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Date of Issue: November 03, 2006

Insurance: Holmes Beach taxpayers hardest hit

Three Anna Maria Island cities wind insurance rates:

City Insurer Insured value Current rate Prior year
Bradenton Beach Citizens $1.22 million $4,573


Anna Maria City Citizens $1.4 million $4,595 $4,239
Holmes Beach Fl League of Cities $2.5 million $49,773 $22,121

Here is yet another insurance horror story on Anna Maria Island - this one for taxpayers in Holmes Beach.

Figure this: Holmes Beach taxpayers are paying more than five times as much for wind insurance to protect city property as taxpayers in the other two Island cities.

The wind insurance bill for the Holmes Beach City Hall complex is now $49,773 - a record. That is more than double what it was last year.

Neither Bradenton Beach nor Anna Maria City have been hit like that.

The disparity is the result of the controversial state-designated wind pool boundaries that divide businesses and non-residential property owners into two groups: those who are eligible for the state's lower-priced Citizens Property Insurance Corp. coverage and those who are not.

Holmes Beach City Hall is outside the wind pool. The city buildings for Bradenton Beach and Anna Maria City are within the measured distance from the Gulf of Mexico that constitutes the wind pool.

"To me, it's just ridiculous that they wouldn't be treated the same," said state Rep. Bill Galvano, a Republican who represents western Manatee County and who has been a leader of the effort to find solutions to the state insurance crisis.

"You are talking about three cities clustered together on a barrier island," he said, "and because of an arbitrary line, Holmes Beach taxpayers have to pay all that extra money."

The wind pool is an area of specific boundaries in coastal counties. On Anna Maria Island, it begins on the shore of the Gulf of Mexico and extends east for 1,000 feet.

Under state rules, the owner of any property inside the wind-zone boundary can go to Citizens for wind insurance if it isn't available from a standard carrier. Residential property outside the wind pool also can qualify for Citizens if no standard insurance can be found.

But the owners of commercial and non-residential property, such as churches and municipal buildings, are not eligible for Citizens if the property is outside the wind zone.

State rules also say that Citizens is supposed to charge rates equal to or greather than insurance offered by regular insurers. But because of the turmoil in today's insurance market, Citizens wind prices are typically a bargain compared to the premiums available from other insurers, such as the unregulated carriers or special groups, including the Florida League of Cities, an organization that sells insurance and other products and services to member cities.

Here is the tale of our three cities when it comes to wind insurance:

  • Bradenton Beach city properties, including city hall, the police department's building, garage and the nearby Tingley Memorial Library, are valued at $1.22 million. The city paid a wind premium of $4,573 to Citizens - an amount that works out to $3,748 per $1 million of coverage.
  • Anna Maria City paid $4,595 for a Citizens wind policy covering $1.4 million in city property, including city hall and the adjacent Island Players playhouse. That works out to $3,282 per $1 million in coverage.
  • Holmes Beach paid $49,773 for wind insurance to protect its $2.5 million in properties, which includes city hall, police and administrative offices and contents. That works out to $19,909 per $1 million of coverage, or more than five times the rate paid by the other two cities.

If Holmes Beach had access to Citizens and was able to get the same rate as Bradenton Beach and Anna Maria City, Holmes Beach would be spending $8,200 to $9,400 for wind insurance, rather than $49,773.

The irony is that Holmes Beach should be getting a break on the wind insurance for its buildings based on the construction and age.

That is because underwriters typically charge higher rates for older buildings such as city halls in Bradenton Beach and Anna Maria.

The Holmes Beach City Hall is nearly new and was constructed to tougher building codes.

Holmes Beach Mayor Carol Whitmore says she will work with Galvano and other legislators "to get things changed as fast as we can, to get some relief" for Holmes Beach, Anna Maria Island and Manatee County.

Whitmore, who is running for an at-large seat on the Manatee County Commission, said she will "do whatever it takes" to encourage insurance reforms, including going to Tallahassee, if necessary, to push for legislative action.

The mayor pointed out that the Legislature had a chance earlier this year to expand the wind pool by approving the amendment proposed by Galvano to expand the pool boundaries for five counties, including Manatee. The measure was defeated by a vote of 57-56.

"That one vote was cast by Rep. Ron Reagan," Whitmore said.

Reagan, a Republican who represents the eastern half of Manatee County, said at the time that he voted against the Galvano amendment because it was opposed by the Republican leadership in the Legislature. Reagan has since taken the position that the amendment "was not the right thing to do at the time because it would have dumped several thousand more policies into Citizens."

He now says he would support expansion of the wind pool for Manatee County if it can be done with "proper" legislation.

Whitmore said she thinks Reagan, a Bradenton insurance agent who is unopposed for re-election, "has been educated" and will be working with new legislators elected this November as well as many veteran lawmakers to correct the insurance crisis.

Owners of commercial and non-residential property outside the wind zone are especially eager for insurance reform as they continue to struggle to find affordable wind coverage.

Some of them would be thrilled to get the per-million rate that Holmes Beach is paying - even if it is five times as much as the other cities.

The annual wind premium from Lloyd's of London for the Island Shopping Center, valued at $2 million, is more than three times that of the city of Holmes Beach. The shopping center is outside the wind pool and doesn't qualify for Citizens.

Neither does Roser Memorial Community Church, which has no wind insurance. The church lost its coverage in June and has been unable to find affordable insurance.

The only insurer willing to write a wind policy for Roser wanted $225,000.

The church and the Island Shopping Center are each valued at about $2 million. If they could obtain wind coverage similar to the Island cities, the premium would be:

  • $39,818 based on the Holmes Beach rate from the Florida League.
  • $7,496 based on the Bradenton Beach rate from Citizens.
  • $6,564 based on the Anna Maria City rate from Citizens.


Homeowner saves $1,300

Anna Maria homeowner Dorothy Perricone is a retired school principal and district administrator who reads The Islander and knows how to follow up on a news tip that can save her money.

Perricone figures she is about $1,300 richer as a result of what she read in the Oct. 18 edition of The Islander about wind insurance.

The article reported that Florida residents who were "taken out" of Citizens and charged higher rates for wind insurance might be able to return to Citizens and its lower rates under an order issued Oct. 11 by the state insurance commissioner.

Perricone was notified this summer that her wind policy was being "taken out" of Citizens and put into Florida Peninsula Insurance Company. But the bill for her wind renewal policy didn't arrive until a few weeks ago.

She was focused on that bill - which was about two and a half times what she knew Citizens would have charged - at about the time she read The Islander.

Perricone knew she had a limited amount of time to act because the new, higher premium was due Nov. 3. Last week she started making phone calls. The first one was to her agent, who told her she couldn't go back to Citizens.

"But I have learned in my life that you can't always take no for an answer," she said.

Next she called Citizens and found a representative there named Judy, who assured her that she could get back into Citizens. Judy said the agent probably hadn't had time to learn about the change ordered by the insurance commission earlier this month. She suggested that Perricone go back to the agent to enlist his help in making the switch.

Sure enough, when Perricone called the agent back to report her conversation with Citizens, he agreed to pursue the matter. As of

Thursday, Oct. 26, the agent assured Perricone he was doing the necessary paperwork to get her back into Citizens at the lower rate.
"This is going to save me about $1,300," Perricone said.