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Bitten By Greedy Pups

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The Tampa Tribune

Published: February 7, 2009

My wife and I moved to Florida from Connecticut in July 2005. While living in Connecticut, I worked for almost 30 years at the home office of one of the country's largest multiline insurance companies.

Insurance companies went merrily along for years collecting premiums and paying normal claims. Then came Hurricane Andrew in 1993. Extensive claims followed. Insurers threatened to pull out of the homeowner's market. The insurance commissioner panicked. He compromised and let them form "pups" - separate entities under the parent company that sold only homeowner's insurance in Florida.

So now, instead of potential hurricane victims in Florida being in the same risk pool as tornado victims in Kansas and Oklahoma, ice storm victims in New York and Kentucky, forest fire victims in California and New Mexico, and flood victims in the Midwest, we were left to provide for ourselves. In this way, the Florida "pups" could show major losses to demand large premium increases and justify dropping policies while the parent company could show major profits.

What should be done? It may be too late to do anything about the pups, but there are many single-line insurance companies out there that specialize in selling only auto, life, pension, health and/or annuity and not homeowner's. Perhaps state, county and local governments, as well as individuals and businesses, can move their insurance policies to these companies and out of the multiline parent companies that own the pups that gouge us.

W. THOMAS WALCH JR.

Jupiter

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