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Favorable hurricane season helps availability of insurance

Gulf Coast ends hurricane season with no damage

MISSISSIPPI GULF COAST – The end of hurricane season always brings a sigh of relief when the

Gulf Coast has escaped storm damage for another year.

Harrison County Civil Defense director Linda Rouse said that there were actually a few more hurricanes

than predicted for the season. “It is just that we were fortunate enough not to have them impact us,”

Rouse said. “We are extremely delighted with that.”

Rouse said while missing the damaging storms is a great relief, it is important that the public not

become complacent, because the Coast is susceptible to damage in any given year.

“Everyone should stay aware and be prepared for whatever comes our way,” she said. “Mitigation

measures are very important. Although we can’t prevent hurricanes from coming in, we can mitigate the

damage by taking actions in advance. That is something we’re trying to get across to everyone.

Businesses need a hurricane plan which takes into consideration mitigation measures they need to do

including reinforcing their building to be more wind resistant and, in low-lying areas, elevating things

that they can.”

Strong construction urged

Rouse said constructing stronger buildings is highly encouraged, and doesn’t cost a lot of money

considering the total cost of the building. Retrofitting also isn’t very expensive, and can be an important

investment to prevent damage to both the building and contents. Rouse highly recommends shuttering

of windows, especially for businesses.

The Coast last suffered a hurricane in October of 1998. As is normally the case after a major disaster,

the potential withdrawal of companies offering insurance coverage was a concern.

“We are very concerned with maintaining markets along the Gulf Coast,” said Ron Hanna, deputy

commissioner, Mississippi Department of Insurance. “And whenever we do not have a hurricane, then

we don’t have to deal with the potential of insurance companies withdrawing from that marketplace. I

think that we have a very stable market on the Coast. The companies that are down there right now are

committed for a long term. However, due to the small number of companies that are writing a large

percentage of the total market, if one left, we would have a very serious problem.”

Six companies write most of business

Six companies write about 70% of the business in the coastal counties.

There is also the state’s wind pool, which is an alternative marketplace for those who cannot buy

property coverage from a traditional insurance company. The wind pool is an association of all the

insurance companies assessed to help fund the program based on the amount of policies the companies

write in the state.

The wind pool covers properties that are at higher risk because of their location, type of structure or age.

Changes contain prices

Hanna said significant changes made by the wind pool board two years ago have provided a much

larger reinsurance program for less cost, and that has helped contain premium prices.

All insurance companies in the state – not just those doing business on the Coast – are required to

participate in the wind pool. Hanna said that one of the first questions asked of new insurance

companies applying to do business in the state is if they will write policies for homes and commercial

property along the Gulf Coast.

“We can’t deny companies admission into the state for not writing coverage on the Coast, but we can

encourage it as much as possible,” Hanna said. “Years like this are good because they eliminate the

wind pool from having to access property insurance industries.”

Starting March 1, Hanna will move to Alabama to be the manager of that state’s equivalent of the wind

pool, which is called the beach pool. Hanna hopes there will be opportunities for the two neighboring

states to develop common programs advantageous to both states.

“In both South Mississippi and South Alabama, there is an explosion of population growth and it is so

vital to maintain the marketplace and balance affordability with availability of coverage,” Hanna said.

Amount of growth a concern

Mike Lockwood, funds manager for State Farm Insurance Companies of Mississippi and Alabama, said

the increase in population and the huge amount of construction in the coastal areas of both states have

raised the potential for damage from a major hurricane.

“I don’t know that any of us – residents, legislators or insurance companies – are prepared for a

really bad hurricane such as Hurricane Camille 31 years ago,” Lockwood said. “If that would occur

again, I am confident none of us are prepared to deal with the devastation that would result. Because of

the huge amount of construction that has occurred, and the large number of new residents in the Coastal

areas, it would create exponential amounts of damage compared to 31 years ago.”

That means anytime the Gulf Coast ends a hurricane season without damage it is good news for all

concerned. But ending a season unscathed is always only a temporary relief as hurricanes are simply a

fact of life in the coastal areas.

“Hurricanes have always occurred irrespective of global warming or other events which might

exacerbate the situation,” Lockwood said. “We’ve always had them. We always will.”

Contact MBJ staff writer Becky Gillette can be contacted at mullein@datasync.com or (228) 872-3457.


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