When it comes to the property insurance business in Florida,
there are two eras: before Hurricane Andrew and after Hurricane
Before Andrew, insurance companies fought for your business.
After Andrew, insurance companies fight to get rid of your business.
Before Andrew, property owners had a dozen or more private
insurance companies to choose from in Florida.
After Andrew, property owners are lucky to find any private
carriers that will take them.
Before Andrew, insurance rates in Florida were low, low, low.
After Andrew, insurance rates are much, much higher and still rising.
But hey, you say, Andrew hit way back in 1992, more than 400
miles south of here. Why should we care?
The $16.5 billion in insured losses Andrew caused occurred
mainly in South Florida, that's true. But the storm turned the
property insurance market upside down throughout Florida -- even
in quiet Duval County.
Only eight hurricanes have hit Northeast Florida since 1900,
none of them considered major storms.
So why are we paying for South Florida's troubles? That's what
Roseann Schonfeld wanted to know when her company decided not to
renew her policy.
Schonfeld is co-owner of the Big Cat Cafe on Beach Boulevard, a
She and her husband, Leonard, own a home in Baymeadows, far from
Following Andrew and two claims totaling less than $2,000, their
insurer, Auto Owners, decided not to renew coverage.
But Schonfeld wasn't too concerned -- someone would surely pick
She called at least 10 different agents -- some independent,
some exclusive representatives of a single insurance company --
without success. She then learned the meaning of three important
letters: JUA. That stands for joint underwriting association.
The state Legislature created the JUA, formally known as the
Florida Residential Property & Casualty Joint Underwriting
Association, following Hurricane Andrew.
Nine carriers became insolvent in Florida after the storm
because of huge claims, while others stopped doing business in
As a result, tens of thousands of homeowners found themselves
without coverage. The biggest concentration of JUA customers has
been in Dade and Broward counties, but about 25,000 local
residents are covered through the "insurer of last resort" --
including the Schonfelds.
"I was very surprised I didn't find anybody else to insure me,"
At the time, it wasn't such a bad deal. The coverage wasn't as
flexible, but it was cheap -- in some cases cheaper than
insurance available in the private market.
Low premiums and high demand resulted in the creation of
Frankenstein's insurance monster.
The JUA recently surpassed 800,000 policies. It is and has been
the third biggest property insurer in the state behind State
Farm and Allstate.
That would be fine if the state wanted to be in the insurance
business. It doesn't. In addition, the JUA doesn't have much
cash -- if the big one hits, the fund will assess private
carriers already operating in the state to pay for claims.
And there have been threats that those carriers will fight
J. Scott Johnson is vice president in charge of public and
industry relations for the 1,200-member Florida Association of
"It's so big," he said of the JUA, "that if that worst-case
storm happens, it would devastate some insurance companies. …