Residents: Insurance Cutbacks Risk Thousands Of Elderly Homeless

Oct. 08--Thousands of retirees could be homeless after a storm in Palm Beach County because of drastic cutbacks in coverage from state-run insurer Citizens, attendees at a meeting Tuesday said.

That is a problem that should concern a lot of people including the Federal Emergency Management Agency, said Briny Breezes resident Paul Stewart, a board member with an association that oversees the community.

"With 162 mobile home parks in Palm Beach County, FEMA could be facing many thousands of homeless elderly folks in the event of a catastrophe," Stewart said at an insurance workshop hosted by state Sen. Maria Sachs, D-Delray Beach.

One problem he sees is the way the rules have changed on these residents. They have been paying premiums over many years that helped Citizens Property Insurance Corp. build a $7.6 billion surplus, but cannot enjoy full access to its coverage because the company has begun offering only a depreciated cash value for mobile homes, not full replacement value.

Policies vary, but that can mean coverage of only 20 percent, for example, on a $100,000 mobile home. For residents on fixed income, that might mean they would not have enough money to rebuild after a storm.

Citizens Property Insurance Corp. Vice President Christine Ashburn, part of a panel of experts hearing residents' concerns, told more than 75 residents, "I acknowledge the plight you are in."

She said she did not have all the answers but was willing to help mobile homeowners see if they could increase coverage in some cases by making the company aware of improvements they have made over the years that may not be reflected in its records, such as putting in a new roof or furnishings.

State law requires Citizens to cover mobile homes built in 1994 or earlier on a depreciated cash-value basis, like cars. In an internal decision, Citizens decided to apply this to all mobile homes regardless of age to reflect what it calls industry standards, The Palm Beach Post has reported. Many homeowners have only recently had their coverage downgraded under this program, so the full ramifications are just now becoming clear to them.

Sachs said she is exploring whether there are ways these problems could be addressed in legislation. When she meets with constituents in coastal communities like Briny Breezes, "this has been the No. 1 issue, property insurance, " Sachs said.

Florida insurance consumer advocate Steve Burgess, who attended the meeting, said he is researching what coverage options are available to residents in the private insurance market. Though a few residents with newer or rebuilt mobiles homes have coverage from private carriers, Citizens is the only choice most residents of communities like Briny Breezes say is available to them.

The goal is to make sure Citizens serves as a last-resort insurer and does not offer more attractive policies than private insurers do, Burgess said -- but also that it does not cut back coverage in a way that becomes "punitive."

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