Five years ago, local contractor Jim Kuhnsman built a hurricane-resistant fortress in St. Petersburg for his family.
With foundation, roofing and walls made of steel and reinforced concrete, the eye-catching edifice in Allendale Terrace not only resembles a medieval castle, it's a good bet to withstand virtually any storm threatening Tampa Bay.
Not good enough, says State Farm.
Along with thousands of other homeowners, Jim and Deann Kuhnsman found out the Illinois-based insurance giant is dropping their property insurance coverage effective Sept. 15.
Deann Kuhnsman said both she and her State Farm agent of 20 years were flabbergasted. "The fact we built this house like we were supposed to, and then they drop us? You'd think if we all built these kinds of wonderful houses, people should insure us."
The Kuhnsmans' agent told them their home was chosen at random as part of a broad reduction of policies, adding that even some State Farm agents are losing coverage.
When State Farm backed off a threat to pull out entirely from Florida's troubled property market last year, it struck a deal with state regulators allowing it to nonrenew 125,000 of its 810,000 residential insurance policies and raise rates an average of 15 percent on those it keeps.
State Farm, the largest private homeowners insurer in Florida even after its cutback, has repeatedly cited exposure to hurricane damage as a chief reason for reducing its footprint in Florida. A letter to the Kuhnsmans specifies that homes being dropped in this round were those most costly to the company in terms of reinsurance, an added layer of coverage that insurers buy to protect themselves from catastrophic losses.
State Farm spokeswoman Michal Connolly said homeowners losing coverage were not selected on a house-by-house basis. Other criteria are in play, such as hurricane exposure in a given neighborhood. "Some homeowners might not think they are (at risk), but when you use the data we have, it could be they're in a general area that could be highly affected by a storm."
Connolly acknowledged this case brings up a tricky issue: She doesn't want to discourage anyone from hurricane-proofing a home, but neither does she want a homeowner to assume that would guarantee coverage. "Obviously in Florida it just makes sense to shore up your home," she said. "Having done that doesn't mean we won't have to take the steps that we have to take here in Florida."
Chris Neal, another State Farm spokesman, said the Kuhnsman situation shows "just how bad" the homeowners market has become in Florida.
"It shows some of the silly things we have to do because of financial circumstances and the inability to manage our business in Florida," Neal said, stressing that the list of dropped homes was computer-generated. "If there were human intervention, and we had handpicked the list, this house probably wouldn't be on it."
Startled by the fury of the 2004 hurricanes, Jim Kuhnsman painstakingly began building his 3,400-square-foot castle that year. He declined to say how much he invested in the endeavor, but said he would charge someone $125 per square foot for a house built like his.
In an interview at the time of construction, Kuhnsman told the St. Petersburg Times his house was nearly impenetrable from the elements. "You can't say hurricane-proof home, you have to say hurricane-resistant home — but really this is a hurricane-proof home. There's nothing to blow off. If a tree fell (on the roof) nothing would happen," he said.
He used 1,000 20-foot steel bars and 150 cubic yards of concrete on the fortress. Each block from the foundation to the roof was reinforced with concrete. The flat roof was constructed with 500 steel rebars placed every 8 inches and 35 yards of concrete.
To further reduce risk of damage, the couple built on high ground in Pinellas County, around Dr. Martin Luther King Jr. Street and 38th Avenue N.
The front-end expenses paid off in cheaper insurance premiums.
After filling out a seven-page form detailing the labor that went into the house, the Kuhnsmans received a $1,600 windstorm mitigation discount. Their property insurance bill this year: an enviable $939 for a house of that size.
This week, Deann Kuhnsman began shopping for insurance alternatives, starting with calls to Nationwide.
And she vowed to be proactive another way: "I'm moving my car insurance (from State Farm) as soon as I lose my homeowners insurance."