Weatherproofing the Wealthy

A new venture offers insurance for million-dollar homes, cars, jewelry, art and more, with about 50 residents in Collier and Lee counties already on board. Those who join pool their risk, with the idea that if only well-constructed, wind-resistant homes are insured, the cost will lessen for all members.

"People are frustrated, that's for sure, with the current situation," says Ross Buchmueller, president and CEO of PURE Risk Management, which launched Privilege Underwriters Reciprocal Exchange (PURE) this past spring. He notes that PURE, on average, is saving customers as much as $6,300 on their annual insurance bill.

Floridians with high-value, well-constructed homes believe they have been subsidizing those with average- to poor-risk homes, says Brad Havemeier, president of Gulfshore Insurance, which represents PURE. Case in point: Homes built since the 2002 code requirements that went through the tough hurricane activity in 2004 and 2005 had 50 percent better "loss experience" than those built prior to 2002.

"The No.1 component that drives the actual premium cost of the insurance policy is loss experience. If an insurance company has more losses, guess what? They'll have to raise their rates," Havemeier says.

PURE is selective in underwriting criteria. To qualify, a home's replacement cost must be $1 million or greater and the home must comply with the latest building codes. "By only offering insurance to people who have a home that either was built to the most current building codes or has been sufficiently hardened from an older construction, we can control costs significantly," he explains.