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2012 Hurricane Season
NAPLES — Dennis England’s mobile home in East Naples looks the same as it did a year ago.
There’s nothing different about it — inside or out.
But when he got his renewal policy from Citizens Property Insurance Corp., the state-run insurer, he felt like part of his home — and nest egg — had blown away.
Since England and his wife, Ruth, in their 70s, first signed up with Citizens years ago, they’ve had $64,000 of coverage on their mobile home, not including personal property or other structures. Their renewal policy — effective in May — cuts that same coverage more than 70 percent, dropping it to $18,000, nowhere near the home’s market value or what it would cost to replace it.
Citizens, created as the insurer of last resort, has been looking for ways to reduce its risks. One way has been to depreciate older manufactured and mobile homes.
In January 2006, Citizens began requiring that all policies like the Englands be written for actual cash value, not replacement cost. The law kicked in for renewals beginning in 2010, but the change happened slowly, reaching some in Southwest Florida for the first time this year.
“It’s happening to all of us in the park,” England said.
He lives in Windjammer Village, a well-manicured mobile home park off Radio Road, where there are about 200 homes.
“Citizens has been the only insurance for our type of home,” England said.
The recent policy change applies to manufactured and mobile homes built before 1994. Statewide, only about 25 percent of the homes are newer than that.
Citizens insures more than 130,000 mobile and manufactured homes across Florida. Most of those policies are for homes built more than 20 years ago.
“Citizens does not have an automated process in place to depreciate these policy types prior to renewal, but relies on a number of factors including in-person appraisals,” said Michael Peltier, a spokesman for the insurer.
England said his agent never contacted him about the policy change or an appraisal.
“We have an insurance company that is automatically devaluing property here in Naples,” he said. “Some new policy. They say if your house is so old, it’s no longer worth much. They are only going by a home’s age. No inspection is done, no look at the neighborhood and what property like yours is selling for.”
With so little coverage, England — a retiree with limited income — questions how he’d be able to replace his home if disaster strikes. And he asks: what if he ever wants to sell it?
“How are you going to be able to resell your home for what it’s actually worth? You can’t,” he said, shaking his head on a recent sunny day, sitting on his front lanai.
Across the state, owners of older mobile and manufactured homes are faced with the same reality, asking themselves the same questions.
While the Federation of Manufactured Home Owners of Florida and the Florida Manufactured Housing Association have pushed to reverse Citizens’ actual cash value policy, bills proposed in the House and Senate haven’t yet made it all the way through the legislative session, which ends next week.
“Someone was telling me that roughly 40 percent of mobile homeowners in the state of Florida have elected not to have insurance because of either the cost or the inability to purchase enough insurance. To me that is an alarming number,” said Jim Ayotte, executive director of the Florida Manufactured Housing Association.
If there’s no change, he said, the actual cash value policy could end up driving retirees out of Florida. If homes are destroyed, but not replaced, it could leave gaping holes in communities.
“It’s a shame for the whole economy,” Ayotte said. “You’re just starting from scratch to rebuild that community.”
Now, older mobile and manufactured homes are treated more like cars by Citizens, said Tim Shaw, CEO of Tim Shaw Insurance-Acentria, with offices in Naples and Fort Myers.
“It’s a tremendous hardship on the people who own these homes,” he said. “If they had a loss, where are you going to find a used mobile home?”
A lender won’t approve a mortgage for more than a home can be insured for, so it limits the pool of buyers for older mobile and manufactured homes, Shaw said.
Carol Yates, a Realtor with ERA Flagship Real Estate in Naples, said the policy has affected sales in parks all over the region and state.
“People don’t want to buy something they are not going to get enough coverage on,” she said. “Some people who can’t get good coverage are backing away from contracts.”
In October, the Englands got a letter from Citizens, warning them their policy was under review to make sure their home was only insured for its actual cash value. A few months later, they received their renewal policy. Their premium would go from $1,362 a year to $1,129, no big change, despite losing most of their coverage.
When the Englands bought their two-bedroom, two-bathroom mobile home in 1998, it was about 10 years old. They paid $67,500 for it. That included a share of ownership in the mobile home park’s land, but they don’t own their lot.
Homes in Windjammer Village had been selling for $70,000 to $150,000, with the newest and biggest ones on the lake going for the most money. Sales have slowed this year.
It’s unclear if a proposal to reinstate coverage for the full value of mobile and manufactured homes will be approved by the end of session — the Senate passed a reform measure Thursday that now goes to the House.
However, other proposed changes could benefit owners like the Englands.
Last year, Citizens dropped coverage for attached screened enclosures, carports and covered patios. In March, the insurer’s board of governors approved a limited buy-back option, allowing owners to purchase coverage for those structures up to $10,000. The rates for added coverage still must be approved by the Florida Office of Insurance Regulation, however, which could take several months, Peltier said.
“There are a lot of people who are confused asking, ‘Can we get this now?’ and the answer is no,” he said.
In 2005, when Hurricane Wilma hit, the Englands lost their carport and that alone cost $14,000 to replace. It was paid for by Citizens.
“Now they won’t cover it,” England said.
So the Englands are in limbo. They have reached out to a new insurance agent in Bonita Springs in hopes she’ll find a way to get them more coverage.
“Say what you want, but when you can only get $18,000 of insurance on a house, it’s not worth much,” England said.