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1 FIRM WRITING, 1 RENEWING WINDSTORM COVERAGE

Feb. 7, 2002 — Things have loosened a wee bit in the territory's tight property insurance market. In the last few days, two companies have begun again to offer windstorm coverage, albeit on a limited basis, according to Roland Groder, who heads the Insurance Task Force of the V.I. Territorial Association of Realtors.
Groder said Thursday that Island Heritage "found a new reinsurer" and is writing policies again. He said an insurance representative told him that the company probably has enough capacity to offer windstorm insurance into March.
And Royal & SunAlliance out of Puerto Rico "is renewing" policies, again," Groder said. "They're not writing anything new though," he added.
Royal has $50 million worth of coverage reserved for AARP members, but, Groder said he has learned that more than 300 people are on the AARP waiting list already.
Just two weeks ago, real estate and insurance industry representatives, and others, were reporting a near-crisis situation, with property sales virtually shut down because of the unavailability of windstorm insurance.
Lt. Gov. Gerard Luz James II, the territory's insurance commissioner, has been at loggerheads with many companies and insurance agents over the companies' requests for rate increases.
James is attending a national meeting of lieutenant governors in Washington, D.C., and could not be reached for comment. There was speculation that he may have granted Royal a slight rate increase, but that could not be confirmed.
Late last week, David Ridgeway, president of the V.I. Insurance Association, and John Harper, association spokesman, confirmed that there was some additional capacity coming but would not name the companies involved.
Ridgeway called it "relief in the near term," but both men stressed that it would provide only limited and temporary relief.
Groder said the real estate industry had been suffering for a long time because of the scarcity of affordable homeowners' insurance, but up until mid-December "there was a little bit of capacity" and "we were able to pull rabbits out of hats." But then, banks ran out of force-place windstorm coverage, and home sales came to a standstill.
"I lost two sales," Groder said. In both cases, the parties were ready to close, but the buyers couldn't obtain a mortgage because banks won't lend money on an uninsured home. "The banks have investors" and can't take that kind of risk, he noted.
Groder is pinning his hopes on a national hazard insurance plan mirroring national flood insurance, a federally backed program designed to ensure availability of coverage to everyone.
He described efforts on the part of the real estate industry to lobby for Congress to pass a law creating a hazard insurance program. District 5 of the National Association of Realtors — encompassing Florida, Georgia, Louisiana, Puerto Rico and the Virgin Islands — has been very active in pushing the 750,000-member national organization to go to bat for it. He said James was active in getting a show of support for the law at a previous gathering of the National Conference of Lieutenant Governors.
According to the National Association of Realtors, Groder said, about 17 percent of the country's gross national product revolves around the selling of homes. And about 40 percent of a homeowner's income revolves around that house.
If Realtors lose the ability to sell property, "we're going to slow the economy down," he said.

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