Big changes in store for Gulf Shores condo owners. OK not really. Anyone who owns a condo in Gulf Shores already knows the price of insurance is skyrocketing.
What they might not know is how coverages may be changing and what new alternatives may become available. Read on for more information.
Insurance undergoing massive changes
Homeowners insurance should be affordable and available, according to Ragan Ingram, assistant commissioner of the Alabama Department of Insurance in Montgomery. Yet "times are tough, and we are not denying it," he told almost 200 agents attending the Mobile Association of Realtors monthly meeting.
After six hurricanes in 2005, insurers across the country are backing out of coastal markets, leaving only reinsurers and state-sponsored insurers of last resort. In many cases, the annual insurance premiums for local condo complexes have doubled or tripled.
The 2005 hurricane season resulted in $53.7 billion in claims, according to the Insurance Information Institute.
"There's a great uncertainty in the market today, and we're working to find solutions," Ingram said.
Since Hurricane Katrina in August 2005, the insurance commission has guided a captive insurance bill through the Alabama Legislature, allowing companies and condo associations to self-insure their properties, according to Ingram.
Another plus is that operators of the beach pool insurance created by the Alabama Insurance Underwriters Association are expected to increase its coverage limits on residential property from the current cap of $350,000 to $500,000, he said. Read more