
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 24, 1993                   TAG: 9304240110
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: TALLAHASSEE, FLA.                                LENGTH: Medium

ALLSTATE JETTISONS 300,000

Florida homeowners, having been notified that Allstate Insurance Co. is canceling 300,000 policies due to losses from Hurricane Andrew, were told Friday by regulators they will be able to find affordable coverage.

"In most cases, unless someone is a very high risk, people will be able to replace their coverage," said Department of Insurance spokeswoman Jill Chamberlin.

Nationwide Mutual Insurance Co., which has a 4 percent market share in Florida, is among the insurers planning to expand their business in the state, she said.

But many policyholders are upset as their insurance rates climb while insurers pay off an estimated $16 billion in claims from the world's costliest natural disaster.

"People are very, very concerned," Insurance Commissioner Tom Gallagher said. "They've been paying for insurance to the same company for 10 or 20 years, and now all of a sudden they're on a list to get canceled."

Allstate, the second-largest insurer in the state, plans to drop 27 percent of its Florida customers and raise rates on others, Gallagher disclosed Thursday. The Sears, Roebuck and Co. subsidiary expects to pay $2.5 billion in claims from the Aug. 24 storm.

Two dozen other companies - including State Farm, Travelers, Hartford, Prudential and Geico - have told Gallagher's office they will sell fewer policies in Florida, and the failure of seven small insurers was blamed directly on hurricane losses.

The state has responded to the growing scarcity of insurance by creating an industry-funded association as an insurer of last resort, but consumers must pay a premium for the coverage.

Florida has no laws preventing companies from canceling coverage, but Gallagher's office will closely monitor upcoming policy increases.

Florida consumers benefited from living in a competitive, high-growth market before Andrew struck by buying coverage at discounts of 10 percent to 15 percent, regulators say.

"At the time Andrew hit, Florida was considered the land of milk and honey by the insurance industry," said Chamberlin. "We had an enormous growing market. The companies were willing to make less money on individual policies in order to get market share."

by CNB