Make us your home page

New insurers finding a niche in Florida

Michael Gold said they forced his hand. A retired office products company executive, he watched the insurance premium on his home jump more than 400 percent over the past few years.

So this spring, he founded People's Trust Homeowner's Insurance, part of Florida's brave new property insurance world of small, nimble companies. He has about 25 employees, about $10-million in capital, and so far, he's signed up about 500 policyholders.

But he says he can write 100,000 policies within 18 months, and 500,000 within five years.

How? Spreading the risk and cutting costs. Boca Raton-based People's Trust is careful how many older and coastal homes it writes, and it has made the relatively unusual move of not employing agents or adjusters. Instead, homeowners buy their policies through the company's Web site, and if a claim is filed, a contractor is sent to the home for estimates and repairs.

"If the homeowner feels comfortable with the settlement, we authorize to get the work done," Gold said in a recent interview. "About 80 percent of nonhurricane claims are water damage from things like ruptured washing machine hoses." Contractors are not paid until the homeowner signs off on the work.

Basic coverage includes wind, but the company writes few policies in high-risk, coastal areas like Miami-Dade and Broward counties.

"We are dedicated," Gold said, "to turning the industry on its head."

The days when giants like Allstate, State Farm and Nationwide ruled Florida are over. Since January 2006, Florida regulators have licensed 25 new homeowner, mobile home and condo insurers. They have names like Safe Harbour, Olympus, Avatar and Magnolia.

At the same time, the Allstates and State Farms have stopped writing new homeowner business and are dropping policies.

Florida requires that new property insurers start with at least $5-million or 10 percent of their total liabilities. The unwritten goal: to prevent another Poe Financial. Three Poe subsidiaries grew too quickly and were forced into insolvency after the hurricanes of 2004-05, leaving Floridians an $800-million tab to pay off through assessments.

The new batch of startup companies is being closely watched to make sure they keep adequate capital. So far, complaints have been few, and the startups are hailed by regulators as key players in Florida's evolving insurance market.

But not everyone is convinced new is improved.

Brian Schneider, a senior insurance analyst at Fitch Ratings, said many new Florida companies appear to be highly leveraged and thinly capitalized relative to the amount of insurance they're writing.

"In a lot of cases, they're not even keeping a significant portion of their profits within the company," Schneider said. Money that should go into reserves leaves the companies, he said, either through commissions or other dividends.

"There's not a whole lot of reason to believe these companies will be around for a long time," Schneider added. "It's more of a plan on the hope that there won't be a huge amount of hurricane activity. And even if the companies go under, they only lose the amount of capital they put it.

"If you believe what the forecasters say, you need higher levels of capital to sustain an insurer in Florida."

Schneider's point seemed to be driven home when American Integrity, a 15-month-old Tampa insurer that has taken 90,000 policies out of state-backed Citizens Property Insurance, did not have the capital necessary last month to qualify for a $5-million matching grant to start selling homeowners business in Louisiana.

American Integrity chief executive Bob Ritchie argued that his company was trying to get approval from both Louisiana and Florida for a long-term strategy of writing policies in several states, and that he will try again.

The point, Ritchie said, is that smaller companies are finding a foothold across the Gulf Coast, and as long as they are careful, they can survive a busy hurricane season and rebound.

"Florida," Ritchie said, "is too large of a market to be ignored."

Tom Zucco can be reached at or (727) 893-8247.


The startups

Among the homeowners insurance companies that recently began offering coverage in Florida:

CompanyStartup DateStartup Capital

People's Trust3/6/2008 $10-million

Insurance Co.

Avatar Insurance Co. 4/14/2008 $10-million

ASI Preferred 4/14/2008 $10-million

Insurance Corp.

Magnolia Insurance Co. 4/28/2008 $23-million

Source: Florida Office of Insurance Regulation

New insurers finding a niche in Florida 07/05/08 [Last modified: Saturday, July 5, 2008 4:33am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  2. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]
  3. Calling it a 'dangerous precedent,' Tampa chamber opposes city tax increase


    TAMPA — Calling the possibility a "dangerous precedent," the Greater Tampa Chamber of Commerce on Thursday took the rare step of opposing City Hall's proposal to raise Tampa's property tax rate because of its impact on business.

    The Greater Tampa Chamber of Commerce voted against supporting a city tax hike on commercial property. Pictured is Bob Rohrlack, CEO of the chamber. | [Times file photo]
  4. Did Hurricane Irma speed the end of Florida orange juice?


    Hurricane Irma plundered Florida's orange belt, leaving a trail of uprooted trees, downed fruit and flooded groves worse than anything growers say they have seen in more than 20 years.

    A large number of oranges lie on the ground at the Story Grove orange grove in the wake of Hurricane Irma on Sept. 13, 2017, in Lake Wales. [Photo by Brian Blanco | Getty Images]
  5. St. Petersburg's newest hotel opens with craft beers, cocktails and Cozy Corners

    Real Estate

    ST. PETERSBURG — Last spring, Ryan Tarrant applied for a job with the new Hyatt Place nearing completion in downtown St. Petersburg. Among the questions an interviewer asked:

    What does this hotel need to succeed?

    Hybar, a bar area with outdoor seating  that will feature craft drinks and Sunday brunch starting Oct. 1, is ready to open at the new Hyatt Place hotel at  25 2nd St. N in downtown St. Petersburg. [SCOTT KEELER   |   Times]