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State challenges insurers for pulling wind coverage

Florida Insurance Commissioner Tom Gallagher said Wednesday that at least several insurance companies are violating the state's moratorium on dropping customers by forcing coastal homeowners into a state-created pool for windstorm coverage.

The action by Gallagher plugs the latest loophole in the state's six-month insurance freeze. The moratorium prohibits companies from dropping customers from May 19 to Nov. 15.

Under Wednesday's ruling, policyhold-ers whose wind coverage was not renewed after May 19 are entitled to have that portion of their coverage reinstated.

Several insurance companies, including Prudential Property and Casualty, have told some of their policyholders that they would be renewed _ but without wind and hail coverage.

Those homeowners would be required to seek wind insurance instead from the Florida Windstorm Underwriting Association, a state-created, industry-backed pool that sells windstorm coverage in certain coastal areas as an "insurer of last resort."

The pool's losses would be paid by all insurance companies operating in Florida, with each company taking a share.

On Wednesday, Prudential was reviewing Gallagher's ruling, said company spokesman Rick Matthews. Prudential's plan would have affected policyholders only in Dade and Broward counties, and not those in the Tampa Bay area, he said.

However, state regulators have received complaints from the Tampa Bay area about other companies, including Cigna Insurance, that were pursuing similar plans, said Department of Insurance spokeswoman Karen Chandler.

She said complaints also have been received about Nationwide Insurance and Nova Casualty, but she was not sure where those complaints originated.

In the Tampa Bay area, the windstorm pool currently provides coverage in coastal sections of lower Pinellas and portions of Hillsborough County.

A hearing has been scheduled by state regulators for July 15 in Tampa on whether to expand windstorm pool coverage to upper Pinellas County. A location for the hearing has not been determined.