Sam Miller recalls those care-free days some 20 years ago when picking up homeowners insurance was an after-thought to buying a new house.
Coverage was readily available from private insurers. And cheap. The deductible for a storm? Maybe $100 to $500. The only folks who had to worry about going to a state-run "insurer of last resort" for windstorm coverage were those party people in the Keys.
Then Hurricane Andrew struck.
Florida's insurance industry is still trying to clean up the mess left behind — high rates, high deductibles, scarce private coverage and special assessments.
When Andrew introduced itself to Florida in August of 1992, Miller was 44 and running the Florida Insurance News Service, a Tallahassee-based group representing the industry. For the next year-and-a-half, he spent half his time commuting to South Florida as co-director of the new Hurricane Insurance Information Center.
The biggest lesson learned, Miller said, was how poorly Florida had planned for the big one.
"Everything we had done prior to Andrew turned out to be wrong," he said.
Andrew wound up being a $15-billion-plus nightmare.
To say it was a seminal moment in transforming the insurance market is an understatement:
• Then: There was a tiny windstorm pool. Now: The state-run insurer of last resort for both wind and standard perils, Citizens Property Insurance, covers 1.4 million policy holders, roughly 20 percent of the market, and a much higher percentage in coastal areas.
• Then: Insurers could easily buy another layer of insurance, called reinsurance, as a hedge against payouts from a multibillion-dollar storm. Now: Insurers have paid billions to bulk up a state Hurricane Catastrophe Fund as a cushion beyond what they can buy in reinsurance.
• Then: State Farm and Allstate covered half of Florida homeowners and out-of-state insurers handled most of the rest. Now: Beyond Citizens and a shrunken State Farm, the list of Top 10 insurers is dominated by small, Florida-based companies.
Miller, now executive vice president of the Florida Insurance Council, said Florida's effort to rebuild its shattered insurance infrastructure has been repeatedly sidetracked. First by the quadruple hurricane season of 2004 that caused insurers to rethink their hurricane models once more. Then by a populist move to cut homeowners rates and make Citizens Property compete with the private marketplace. Most recently, by costly sinkhole claims that drove up rates and muzzled reserves.
Twenty years later, Florida property owners still are dealing with the painful scars of Andrew.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.