May 24, 2005
Minutes General Meeting
Present: Kären Nady, Interim President, Frank Lamb, Vice-President, Glenn Robinson, Treasurer, Lon Johnston, Utility Board, Cathy Barnette, Governmental Affairs, Ernest Berger, Membership and Louie Nady, Finance
54 guests attended the meeting
Absent: Donald Terry, SEEDS
Guest Speaker: Senator Bradley Byrne
Ernest Berger called the meeting to order at 6:32p.m.
Approval of Minutes: Frank Lamb made a motion, seconded by Lon Johnston, to accept the minutes of March 1, 2005 general meeting as written.
Treasurer's Report: Glenn Robinson reported the checking balance is $2,985.10. The balance in the trust account is $1,015,02. There are no outstanding expenses to date.
Committee Reports: Ernest Berger commented that the normal business portion of the general meeting would be deferred to the end of the meeting to allow Senator Byrne time to speak and answer questions. He introduced Al Guarisco, Kären Nady, Lon Johnston, Cathy Barnette and Louie Nady as heads of committees and special projects and stated that they would be available for their committee report information after the meeting.
Program: Frank Lamb spoke briefly about Sen. Bradley Byrne and the Hurricane Task Force before introducing Senator Byrne.
Senator Byrne provided an overview of recent disasters affecting insurance rates in the US: Hurricane Andrew in the 1990's and the attack on the World Trade Center on 9/11 were significant disaster events for insurance and re-insurance companies. Re-insurance funds, pooled from insurance companies, are the source of funds to pay claims. The federal government provides FEMA funds.
After Hurricane Ivan (and a large number of claims) some companies providing insurance in Alabama discovered they would not be able to cover losses in another large event. Several thousand policies have, or will be, cancelled in Mobile and Baldwin County.
Insurance maps have been re-drawn making all areas within 5 miles of the coastline in a beach zone. Gulf Shores and Daphne are in the same zone for insurance coverage. Some companies will provide homeowner's insurance for fire and theft, but will either no longer offer wind coverage or limit writing policies to a few per month.
The State of Florida (which is almost entirely coastal) offers separate wind coverage insurance for residents from a statewide pool of funds. Alabama has only 2 coastal counties (Baldwin and Mobile) making a state pool of coverage unrealistic. Also, Alabama, unlike some states, can not ask for a moratorium on canceling policies. The Hurricane Task force was formed to try to resolve insurance problems for residents in Baldwin and Mobile counties
The Task Force is a work in progress and members include insurance companies. Areas the task force is examining include: (1) Admitted (licensed by the state) and Non-admitted companies can offer insurance. (Biggest problem has been with non-admitted companies.) (2) Wind insurance (of last resort) can be obtained from AIUA Beach Pool which is subsidized by insurance companies who provide wind insurance. It is not a government pool. Currently 3,000 customers use this pool 75% out of state residents/25% in state residents. (3) Good building codes, International Building Codes (IBC) Daphne has 1999 IBC, Mobile adopted 2001 IBC . Gulfshores is increasing its building standards. Upgrades to property may mean less cost to insurance. (4) Need to create a healthy, competitive business climate for large insurance companies to offer insurance in Alabama. If too many restrictions on companies it will decrease the pool of provider and increase cost to consumers.
Short term solutions if facing cancellation: Shop insurance companies now, shop a lot of companies and check independent brokers. Be willing to bundle insurance (house and car) for the best rate. Shop for prices and insurance before a named storm enters the Gulf of Mexico. Higher deductible may mean lower annual cost. Understand the value of the deductible is it a set price or a % of the value of the house. Do not assume that your insurance will not be cancelled because you have been with a company for decades.
During the group discussion members cited experience with specific companies and problems finding insurance. Sen. Byrne offered to help several people find insurance solutions. The group also discussed IBC codes. If the City of Daphne does not adopt stricter IBC codes, will residents be able to purchase affordable wind coverage insurance? Also, would retrofitting be a solution to reduced rates?
Announcements: There were no announcements. Ernest Berger thanked Sen. Byrne and invited those attending to become members of OTDWA.
The meeting was adjourned at 7:58 p.m. Members remained to speak with Senator Byrne and committee chairpersons.