From The Tampa Tribune:

Insurance Crisis? What Crisis?
 

By BAIRD HELGESON , The Tampa Tribune
Tampa Bay Online
Aug 26, 2006

(SEE INSURANCE COMPARISON CHART BELOW)

PALATKA - Perhaps Putnam County's motto should be, "Come for the old Florida charm; stay for the cheap property insurance."

As many Floridians seethe over home insurance bills that can rival the price of a large plasma television, Putnam County homeowners celebrate the cheapest rates in Florida.

The owner of a five-year-old Putnam County home insured for $150,000 would pay an average annual premium of about $760, about 45 percent less than for the identical home in Hillsborough County, according to the Florida Office of Insurance Regulation.

"We are blessed," said Lynn Braddy, a real estate agent who lives in a historical home along the St. Johns River in Palatka.

Experts rank Florida's property insurance market as the worst in the nation. Many private insurers are dropping policies in the state after two years of destructive storms wiped out a decade of profit. Other insurers have asked state regulators for rate increases of more than 100 percent in some areas.

So while many Floridians lament a property insurance crisis, Putnam County has emerged as a relative safe haven.

Named after Benjamin A. Putnam, a soldier in the first Seminole War, the county is a landscape of rolling hills, citrus groves and lakes filled with lunker bass. Roads slice through forests and pastureland, running past honey stands, watermelon fields and along the St. Johns River. Just north of the Ocala National Forest, Putnam County is less than an hour drive from St. Augustine.

It's Not Hurricane Territory

It doesn't take an insurance expert to explain why the county's insurance rates are so low. Just ask Carlos Pacheco.

"We are far away from the ocean," said Pacheco, a retired maintenance worker from New York. "The last time a hurricane even came close was in 1964."

That's when Hurricane Cleo, a Category 4 storm, hit Miami and crept north before weakening into a strong tropical storm as it moved over the county.

The eight hurricanes that hit Florida over the past two years did little damage in the county. Hurricanes destroyed 123 homes, mostly older mobile homes, according to the Office of Insurance Regulation. By comparison, the same storms destroyed 3,787 homes in Polk County.

Insurance companies love to do business in places like Putnam County. First, there's not much to lose.

Even in Palatka, it's tough to spend more than $200,000 for a home, unless it's on a lake or river. The average price of a home in Putnam County is about $92,000, compared with the statewide average of $156,000. The county has just $3.8 billion in taxable property. By comparison, Hillsborough County has about $78.7 billion.

Insurance companies also look favorably at Putnam County's low crime rate and the minimal chance they will have to pay out for a home burglary, said Ryan Priest, a spokesman with Allstate Floridian.

Another advantage is competition. Unlike most areas of Florida, insurers will write policies in Putnam County, keeping prices low. Citizens Property Insurance Corp., the state-created insurer for those who can't get coverage in the private market, has just 2,423 policies in the county, mostly for mobile homes.

Janet Silverman, a property insurance agent, bought a mobile home in the county after fleeing the high cost of living in Fort Lauderdale.

She is proof that even though premiums are low, Putnam County residents aren't immune from skyrocketing rates. Silverman now spends $840 a year to insure her mobile home, up from $360 two years ago.

She bought a 1995 mobile home on one-quarter acre of land for $32,000. "It's pretty tough to beat the cost of living here," she said.

Some other Florida counties have relatively low rates. Homeowners in about a dozen, mostly rural, interior counties pay annual premiums of less than $1,000 for a house insured for $150,000. Putnam County residents just happen to pay the least.

Rates And Rebirth

Several area residents admitted they don't dwell on their property insurance bills. They had harsh things to say about property taxes, but most couldn't remember how much they paid to insure their homes.

Some wondered whether the county's low insurance rates could spur a rebirth of the area as people tire of life on Florida's storm-rattled shores. Florida's interior once flourished because of residents' reluctance to live in dangerous coastal areas.

"Palatka might come full circle and become a destination for people trying to find Mayberry," said John Burns, who moved to the area from New Orleans in 1995.

Nancy Reiland and her husband, Tom, moved to Putnam County after Hurricane Charley made landfall just south of their home in North Port.

The Reilands sought a more serene lifestyle, away from the frenzied coast and away from storms.

They knew that the area would be less expensive than Sarasota County but never imagined insurance would be so much less.

State Farm charged $1,446 a year to cover their North Port home, which was insured for $144,300. They now pay $1,047 to cover a home insured for $199,000.

"It was just meant to be," Reiland said.

Dale Jones likes the county just the way it is.

He manages the Gateway Fish Camp in Welaka, a tiny outpost of cottages and fishing docks on the banks of the St. Johns River, just across from the Ocala National Forest.

Jones also runs a small ferry across the St. Johns River to the national forest. The ferry carries one car at a time, at a cost of $10 per trip. From Welaka, the ferry cuts about 30 minutes from the drive to Ocala.

Jones explained that the St. Johns River flooded a few years back, ruining a fishing dock and several cottages. Jones said he borrowed the money to repair the camp rather than bother with insurance adjusters and the risk of higher premiums.

Then a few silent seconds passed. A nearby alligator dipped under the water. An osprey soared above. An angler hooked a mullet.

"This is about as loud as it gets, even on weekends," Jones said.

That's what property insurers like to hear.

Reporter Baird Helgeson can be reached at (813) 259-7668, or bhelgeson@tampatrib.com.

INSURANCE COMPARISON

A home's location and the quality of construction are factors property insurers use to determine an annual premium. Here's a breakdown of the annual premium homeowners would pay in various counties if they owned similar five-year-old masonry homes insured for $150,000 with 2 percent deductibles.

Source: Florida Office of Insurance Regulation