Inexpensive homes now costly to insure

Mobile home owners petition the state for relief as premiums double in coastal areas.

Article Courtesy of The St. Petersburg Times

Published November 24, 2005

TALLAHASSEE - After decades of a low-cost living in Florida's mobile home communities, the housing option that has wooed thousands of retirees to the Sunshine State is suddenly more expensive because of the rising cost of insurance.

Shocked and scared by the spiraling cost of insurance - if they can even find someone to write them a policy - more than 35,000 mobile home owners, many of them elderly and on fixed incomes, have signed petitions to Gov. Jeb Bush and the Florida Cabinet asking them to intervene.

The petitions, simple and to the point, don't offer a solution, they merely plead for help: "Now Florida's insurance industry may do what hurricanes failed to do: destroy Florida's most popular affordable housing alternative," the petition reads. "Please help us keep our homes by helping us obtain affordable homeowner's insurance."

"People have been crying and almost ready to take a nervous breakdown," said 62-year-old retiree Don Hazelton of Largo's Whispering Pines community, who is president of the Federation of Manufactured Home Owners of Florida that organized the petition drive. He's seen his premium rise from $400 before the 2004 hurricane season to more than $880. "There's got to be something that can be done. People are having to choose between insurance and medicine."

Regulators are sympathetic, but say they don't have a solution for the 1-million residents, some of them working-class families, who call manufactured housing home. The issue is under review by a statewide hurricane housing task force, but no viable proposals exist, Florida Insurance Commissioner Kevin McCarty told the Cabinet on Tuesday as the petitions, filling a carry-on-size suitcase, sat on a table in front of them.

"It's a complicated problem, much more complicated in mobile homes than in site-built homes," McCarty said. "It's not clear what we can do that will make a difference."

Part of the reason is many of Florida's mobile homes were built before 1994 federal manufacturing standards made them less susceptible to wind damage, McCarty said. A recent survey of Palm Beach, Broward and Miami-Dade county homes found that more than four out of five mobile homes were built before the tougher standards.

While many mobile home owners try to "harden" their homes with foundations or external bracing, it's not always clear whether it will work against hurricane-force winds, McCarty said.

Five insurers have left the mobile home market in the past year after the 2004 hurricanes showed the industry's projections had "woefully underestimated the losses" on mobile homes, McCarty said. "These were major players who'd done everything by the book . . . and they were really leveled in the hurricane season last year."

Roughly 462,000 mobile home policies were in effect on June 30, according to state regulators. But the market is rapidly changing with Citizens Property Insurance Corp., the state-backed insurer of last resort, seeing a huge influx of policies. By the end of October, the number of mobile home policies for traditional homeowners or windstorm coverage written by Citizens had more than doubled to 76,000 from 35,500 at the end of 2004.

The result has been sticker shock, with most mobile home owners in coastal areas seeing their premiums double this year or next. By law, Citizens must charge the highest premium in the market so as not to compete with private insurers.

But Sam Miller of the Florida Insurance Council said there's little to compete with. "Mobile homes have just become uninsurable for private companies. That's not news the people in mobile homes like to hear, but that's the reality," Miller said.