But others are skeptical. “It’s a creative approach,” said Michael Koziol, a public policyspecialist at the Property Casualty Insurers Association of America, a large insurance tradegroup. “But like any new company, there’s a certain risk. More new companies go under thanold companies.”Robert P. Hartwig, the president and chief economist at the Insurance Information Institute, atrade group in New York, said that even with insurance premium prices at their all-time highin Florida, they were still not high enough to offset all the potential damage that manyweather analysts anticipate over the next decade or so.Mr. Buchmueller says his company will have considerably more capital than most Floridastart-ups — an estimated $45 million by the end of the year. And he says that he is confidentthat he has found a gap in the market where the going prices are higher than the actual risk.“Everyone in Florida thinks they’re paying too much for insurance,” he said. “And some of them are right.”Florida has been hit by a number of hurricanes in the last few years. The insurers have paidbillions of dollars in claims, and prices in the state are the highest in the nation. Some peopleare paying almost as much for insurance as for mortgage payments. And every week, 15,000homeowners in Florida are requesting bare-bones coverage from the state-run insuranceagency because no one else will sell it to them — at any price.In January, Florida’s legislature went into special session to deal with the insurance crisis anddecided to force down prices for all companies, including Mr. Buchmueller’s, by perhaps 20percent.But many insurance experts say that if hurricane damage is heavy in the next few years, thestate will probably have to make up for the price cut and possibly a lot more in claims costsby issuing bonds and passing on potentially enormous expenses to all policyholders.Florida regulators welcomed Mr. Buchmueller’s company as a new source of coverage. Theyapproved his plan in mid-January, and he has started selling policies through independentagents across the state.Charles Kilvert, the owner of the Claude D. Reese insurance agency in Palm Beach, said thefirst question he hears is: “Are these guys going to pay their claims?”“I tell them, ‘These guys are top-flight industry insiders,’ ” he said. “And they’re veryconservative. Whereas the state allows an insurance company to take in $10 of premium for every dollar it’s got for paying claims, these guys are coming in at less than one to one.”One of Mr. Buchmueller’s first customers, Ellis Kern, owns a two-story, pale-yellowMediterranean-style home on a golf course several miles inland from West Palm Beach. Mr.Kern, a manufacturing executive, said he had been paying $15,175.86 a year for $1.2 millionin coverage from a unit of Lloyd’s of London. He is now paying $6,845 to Mr. Buchmueller’scompany for $1.7 million in coverage.“Obviously,” Mr. Kern said, “the first thing was that there was a savings.”
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