Released: August 31, 2006

Storm passes, but insurance worries stay

Source: By Joseph B. Treaster, New York Times (Free Registration)

Jim Pozo felt he got a break on Wednesday when Tropical Storm Ernesto turned out to be nothing more than a slightly windy rainstorm as it crossed South Florida.

And that was not just because his three-bedroom house near downtown Miami was unscathed. He had been worried, he said, that a storm causing even modest damage would push up his already sky-high insurance premiums.

“I don’t know how people can afford it at these rates,’’ said Mr. Pozo, a real estate broker and investor. Another big storm, he said “is just going to make it go up more.’’

All along the coasts, from Texas to New England, insurers suffering from hurricane jitters are raising rates and cutting back on coverage. But nowhere is the situation more severe than in Florida, particularly here in South Florida and in the Florida Panhandle, where storms in recent years have added billions to the insurers’ losses.

“Even though this was a very mild tropical storm, it reminds the insurance industry of the risk involved in underwriting insurance in Florida and will make them even more cautious,’’ said J. Antonio Villamil, the chairman of Gov. Jeb Bush’s council of economic advisers and the chief executive of the Washington Economics Group, an economic and business consultant in Coral Gables.

Read Full Article: Storm passes, but insurance worries stay