The Storm of the Century, as it's now called, brought winds that shredded roofs, floods that left boats stranded on land and financial consequences that forever changed the property insurance landscape in Florida.
Arriving 20 years ago this week in the wake of powerful Hurricane Andrew, the freak winter storm killed an estimated 310 people nationwide and caused more than $2 billion in property damage across 22 eastern states, most of that occurring in Florida.
"No Name," as the storm was known in Florida at the time because winter storms don't get names, packed a double whammy of hurricane-force winds and a tidal surge as high as 12 feet in some places. It spawned 11 tornadoes, flooded low-lying areas and left its mark on 18,000 structures in Florida. It dumped as much as six inches of snow on parts of the panhandle.
The storm wreaked havoc across 38 of the state's 67 counties, battering both sides of the peninsula and highlighting the exposure insurance companies face when writing policies in a state that’s always waiting for the big one.
First, there was Andrew, which caused $20 billion in damage, and then, seven months later, the Storm of the Century, which ran up a $500 million tab on the Florida gulf coast alone.
Together, they created the Florida property insurance nightmare that exists today in which private insurers won’t write policies in coastal areas, premiums are soaring, coverage is shrinking and state-backed Citizens Property Insurance is carrying what many believe is far too much of the risk.
“Those back-to-back (storms) really started an overall market (and were) just catastrophic for the industry," said Paula Blanda, vice president of West Coast Insurance Group in St. Petersburg.
The path to Citizens
Eleven insurance companies went bankrupt after the storms, and many of those that remained stopped writing or renewing policies.
Nearly a million coastal homeowners couldn’t find any insurance, so the Florida Legislature created two entities as the insurers of last resort, the Florida Residential Property and Casualty Joint Underwriting Association and the Florida Windstorm Underwriting Association.
Citizens came about in 2002, when the Legislature merged the FRPCJUA and FWUA into a not-for-profit insurance provider for homeowners who can’t get coverage elsewhere.
There's no simple explanation for why Floridans have to pay so much and are getting less from their property insurance. Among the factors: the cost of reinsurance, which impacted by world-wide natural disasters, and even unnatural ones, such as the Sept. 11, 2001 terrorist attacks.
“Here in Florida, to do insurance, our companies have to purchase reinsurance,” Blanda said. “The reinsurance insures the insurance companies. It’s based off the global insurance market.”
Catastrophes such Hurricane Katrina, the costliest natural disaster in American history, and the tsunami and earthquake in Japan, affect reinsurance availability and cost, experts say.
“It’s been extremely difficult, and it’s getting even more difficult,” Blanda said. “We’ve had, even in our country the past couple of years, the floods and the horrific tornadoes. So it all builds up to truly impact our industry – especially in Florida, where was are so coastal.”
Remembering the storm
Tom Montgomery owns and manages 20 Subway restaurants. He had a single store in Madeira Beach in 1993, and it was whalloped by the Storm of the Century.
“I received a call around midnight from the manager of the store, and he told me he was hiding in the cooler and that when he looked out, he could see the sky because the roof had torn loose,” Montgomery recalled in an interview by Bay News 9's Al Ruechel. “The one side of the building had caved in.”
Heather Johnstone was a 16-year-old store employee at the time, working her first job. She narrowly missed being caught in the elements when the big wind hit.
“I came in the back door and the whole front was gone,” she remembered. “Napkins, food, everything were scattered around. But the crazy thing is, I looked around and the wall the clock was still sitting there.”
The Subway is still there at 15031 Gulf Boulevard, but now it's built to post-1993 building codes. The floor was raised several feet to protect from storm surge. Windows, doors and roofing were all made to withstand strong winds.
Of course, there's only so much a better-built building can withstand.
"You know, there is no shutter system that will prevent storm surge from coming into your home,” noted Pinellas County communications specialist Tom Iovino.
An insurance mess
In the aftermath of Andrew and the Storm of the Century, state policymakers fortified the hurricane catastrophe fund (CAT) to plan for future disasters.
They also implemented a surcharge of $2 on homeowners policies and $4 on commercial polices to hire and train emergency managers and buy equipment. An annual hurricane exercise, held every May, helps local and state disaster managers prepare for what many believe is an eventuality.
Meanwhile, Citizens has emerged as the state’s largest insurer, much the dismay of property owners who have no choice but to accept the high rates and reduced coverage.
Premiums rose 10.8 percent last year, even though Citizens has $15 billion portfolio and record cash reserves after seven years without a major hurricane, according the Tampa Bay Times.
A Times story and inspector general report documenting huge raises and exorbitant spending by Citizens executives has only infuriated homeowners and many of their elected representatives more.
For now, many Floridians are stuck with Citizens. And, on the 20-year anniversary of the Storm of a Century, the knowledge that they live in a paradise that's always in the path of calamity.