More than two dozen organizers of the grassroots Homeowners’ Hurricane Insurance Initiative converged on the State Capitol Wednesday to plead for insurance reform along the repeatedly ravaged Gulf Coast.
Members of HHII were asked to testify before the Alabama House Banking and Insurance Committee regarding the impact of soaring insurance premiums on coastal residents since back-to-back hurricanes pummeled the area in 2004 and 2005.
Almost four years later, HHII organizers contend unaffordable premiums—especially those required in areas prone to wind and hail damage—are aggravating an already precarious real-estate climate that could potentially drive longtime residents from the region and ultimately cripple the state’s tourism industry.
About 30 participants—some of whom would be unable to make the early morning trek to Montgomery on Wednesday—gathered Monday evening at Spanish Fort Presbyterian Church to discuss logistics and strategy for the trip.
The legislative presentation represents 18 months of investigation by members of the Coastal Baldwin Churches’ Community Organization, a member of All Churches Together, or ACT-II.
Stan Virden, a Gulf Shores resident and active advocate for the initiative, said the issue is a simple one of misperception.
“There’s this perception that everybody down here is a millionaire living on the beach, golfing and swimming and living in half-a-million dollar houses, and that simply isn’t true,” Virden said.
In fact, the majority of folks who tend to take advantage of the area’s amenities are welcomed tourists, he said, but that experience relies on the hard work and availability of locals to keep the economy churning.
“It’s the residents who have taken the hit,” he said, adding, “We have a number of people well below the median income level, experiencing difficulty keeping up with their mortgages.”
According to the 2000 U.S. Census, Baldwin County’s median income is $40,250 per household and $47,028 per family.
In his own case, Virden said recent insurance increases have added almost $500 per month to his housing costs.
In 1996, when he moved to Gulf Shores from Cincinnati, Virden said his financial insurance responsibilities totaled less than $1,000 per year and fell “easily within” his budget at the time.
Today that same coverage—including homeowners, property, flood and wind damage – is approaching $6,000 annually.
“Now I’m having to dip into my equity,” said Virden, who has lived a migratory life complete with 49 residences and, therefore, little time to build equity prior to relocating to the Gulf Coast.
“I’m 75 years old with 25 years left on a 30-year mortgage I can’t keep up if I can’t keep up my insurance,” he said.
And even though he has never filed an insurance claim on his West Canal Street home despite the occurrence of seven hurricanes during his residence, Virden is dealing with his fourth insurance company in 12 years. The first three declined to renew his coverage following inclement weather events, he said.
“My house has survived seven hurricanes. I’ve never put in a claim, and what little damage has been done I’ve been able to fix myself,” he said. “It means when I pass on, I will have a lot less to leave for my wife, and she’ll be in an even worse situation than we are in now.”
Deborah Benton is an Elberta-based Realtor who survived her own foreclosure proceedings and is working to educate others in Baldwin and Mobile counties about resources available for ailing homeowners.
HHII legislation, she said, is imperative if Baldwin County residents intend to reverse the insurance crisis confronting them, especially considering homeowners who live as far north of the Gulf Coast as 80 miles have received notice of either non-renewal or significant wind-and-hail coverage increases since Hurricanes Ivan and Katrina.
Several months ago, for instance, coverage for a $130,000 home would have run about $1,800 annually but now is closer to $4,000, adding several hundred dollars to a homeowner’s mortgage payment and in some instances negatively impacting a potential buyer’s income-to-debt ratio.
Earl Janssen, who moved to Foley from Iowa in 1996, is a charter member of Grace Lutheran Church in Gulf Shores and has been working with HHII since its inception 18 months ago.
Janssen, who was among those unable to attend the legislative presentation, said the planning meeting in Spanish Fort set an “upbeat” tone once new participants understood the ground rules.
“We have a problem sometimes with people wanting to come to our meetings because they want answers immediately, and this is not the sort of issue where that’s going to happen,” he said.
“This insurance crisis wasn’t created overnight, and we’re not going to solve it overnight, but there are solutions available to us.”
Janssen said he became involved with the initiative in October 2007 through Grace Lutheran when insurance concerns “bubbled to the top” for local parishioners and then among surrounding communities.
“We know this is an issue affecting everyone in our area, but people have to understand that we want to do this right and make sure we follow the proper protocol for getting legislation passed, and that’s going to take time,” he said.
Specifically, Janssen said HHII organizers would like to see the insurance burden spread more evenly across the state rather than placing it squarely on the shoulders of coastal residents.
Virden agreed.
“We need to see premiums come down to affordable levels that are reasonable, and we need to be able to depend on our insurance companies; but it’s the premiums that are driving people into the ground right now,” Virden said.
“If people start moving out of here then the tourism industry is going to decline, too because it relies on the people who live here to function.”
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