Orlando Sentinel

New hurricane insurance covers more costs

- By Ron Hurtibise

In Florida, discussion about hurricane insurance often focuses more on what isn’t covered than what is covered.

Did water rise up through your sliding glass door and damage your wood floor and drywall? Sorry, you need flood insurance for that.

Damaged roof tiles didn’t exceed your $6,000 deductible? Whip out the credit card.

Evacuating and need gas and lodging? Hit the ATM on the way out of town.

Now, homeowners can buy coverage that fills in those gaps. A new insurance product has emerged in Florida that reimburses out-of-pocket expenses not covered by traditiona­l insurance.

Called StormPeace, it’s offered by a company, Assured Risk Cover, that promises to wire money to policyhold­ers’ bank accounts within 72 hours after storms with no inspection­s, no adjusters and no deductible.

Policyhold­ers have 45 days to submit proof of loss — receipts, contractor­s’ estimates, even a handwritte­n affidavit, said Alok Jha, founder and CEO of the Pleasanton, Calif.-based company, which began offering policies to Floridians in 2017.

Homeowners can purchase up to the amount of their hurricane deductible, capped at $60,000. The coverage can be used for a wide range of hurricaner­elated expenses, including food spoilage, generators, gasoline, damaged fencing, downed trees, flood damage from storm surge, damaged car ports, evacuation expenses and more.

After Hurricane Irma’s journey through Florida last year, nearly a third — or 297,000 — of 924,400 insurance claims were closed with no payment, according to the Florida Office of Insurance Regulation. Many of those were because the estimated cost to repair damage fell short of policyhold­ers’ deductible­s, leaving policyhold­ers to make up the difference.

In a telephone interview, Jha said he left his career in catastroph­e risk software modeling about five years ago to concentrat­e on doing “something meaningful rather than just making money.”

After developing and patenting the concept behind StormPeace, he found a venture capital firm to back the company financiall­y and has purchased “tens of millions of dollars” in reinsuranc­e from a major global reinsuranc­e provider, he said.

Homeowners can purchase as little as $1,000 in coverage for the year at prices that depend on where their home is located but average 6 percent of their coverage limit.

Although using it to supplement traditiona­l homeowner insurance policies is the ideal approach, the product is also available to anyone without traditiona­l insurance, including renters and owners of manufactur­ed homes.

The amount of the payout depends on the strength of the storm and how close it gets to a policyhold­er’s home. As the storm passes, the company sends its policyhold­ers an email telling them how much money they can claim.

“As long as the hurricane triggers are met, how the loss occurred doesn’t matter,” Jha said.

Jennifer Peeples, owner of a Sarasota insurance agency, said she decided to try it out last year and paid $303 for up to $5,000 in coverage. “When the storm passed 26 miles from my home as a Category 2, I got an email saying I qualified for $750, and two days later it was in my account,” she said.

She used the money to replace spoiled food, broken fence boards and screens blown out of her screened porch as well as to clean up downed limbs in her backyard, she said.

Since then, Peeples has become one of the product’s biggest cheerleade­rs. All nine of her employees are now covered, she said, adding that one in four of the agency’s new and renewing customers buy it after hearing how it works.

The Florida Associatio­n of Insurance Agents endorsed it and has urged its members to offer it to their customers, associatio­n president Jeff Grady said.

“We did research on the company and thought they were real profession­als, that they knew their stuff,” Grady said. “We believed they have strong backing and a thoughtful idea. We want to see if it takes hold in the marketplac­e.”

Another believer is former longtime Florida Insurance Commission­er Kevin McCarty, who has agreed to join the company’s board of advisers, the company announced last week.

Neither Jha nor Grady are aware of any competitor­s offering similar products to homeowners.

But Jha said he wouldn’t be surprised if competitor­s emerge, or even if traditiona­l insurers begin offering comparable coverage to customers.

And that has already happened. In April, Ormond Beach-based Security First Insurance Co. submitted a proposal to offer supplement­al Hurricane Expense Coverage for items that have been excluded from their policies.

Depending on what customers choose, coverage would kick in when a loss is caused by sustained hurricane force winds of at least 74 mph or gusts of at least 96 mph.

Benefits would include removal of debris by the company, payment of up to $500 for evacuation expenses and food spoilage, plus payment for damage to awnings, fences, docks or other structures over water, outbuildin­gs, screen enclosures, pool cages and carports.

Security First’s proposal is under review by the Office of Insurance Regulation, according to Karen Kees, spokeswoma­n for the Florida Office of Insurance Regulation.

StormPeace, meanwhile, undergoes no state review because it is sold through an unregulate­d surplus carrier. In October 2016, an attorney for the state office told StormPeace that it had no objection to the product but might take future administra­tive actions “should evidence arise” that the company is making false or misleading claims or operating in violation of the law.

Jha hopes to expand eventually to all states on the East Coast and Gulf of Mexico vulnerable to hurricanes, he said.

Sales in Florida so far this year are strong, he said, although he declined to provide specific numbers.

 ?? KAYLA O’BRIEN/STAFF FILE PHOTO ?? Phyllis Walters and her dog Snoop look at damage inside their home on Cayman Way in Orlando after Hurricane Irma hit Central Florida in September 2017. A new hurricane insurance helps cover more storm-related costs.
KAYLA O’BRIEN/STAFF FILE PHOTO Phyllis Walters and her dog Snoop look at damage inside their home on Cayman Way in Orlando after Hurricane Irma hit Central Florida in September 2017. A new hurricane insurance helps cover more storm-related costs.

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