Some Coast Businesses Stunned By Wind Pool Insurance Hike - - The News for South Mississippi

Some Coast Businesses Stunned By Wind Pool Insurance Hike

Bobby Mahoney, owner of Mary Mahoney's Restaurant in Biloxi, isn't worried about the nearly tripled rate for business insurance in Mississippi's wind pool - because he's not participating.

"My building is paid for," says Mahoney. "I have no bank breathing down my neck saying, 'Hey, you've gotta have this or you've gotta have that.'"

But Mahoney's lunch guests from the Biloxi Businessmen's Club have plenty to worry about.  

"The Insurance Commissioner really went too high on this," says local businessman Robert Barq. "The 90 percent on homeowners is outrageous. But almost 300 percent for a commercial business? That's mighty, mighty hard to face."

In fact, Barq believes the 268 percent increase in wind pool premiums is going to make everyone's redevelopment nightmares come true.  

"Your Highway 90 has got to either be casinos or condos," says Barq. "I don't think you'll see restaurants. I don't think you'll see free standing buildings."

People's Bank President and Mississippi Gulf Coast Economic Development Council member Chevis Swetman has crunched the numbers and doesn't know how new businesses will be able to afford coverage.  

"A wood framed business, for a premium of a million dollars used to be $13,400. Today it would be $35,950," says Swetman. "If you're financing it, the bank is going to require that you have the insurance. So, we're afraid the insurance premium is actually going to be greater than the principal and interest payment."

And those are additional costs that self-insured businessmen, like Mahoney, say will eventually cost everyone.

"It would severely effect my bottom line, you know. And the profit wouldn't be there," says Mahoney. "And, of course, I know most people would try to pass it on to consumers."

There is one glimmer of hope. Many of these same business people, along with members of the South Mississippi's legislative delegation, will be in Jackson next Monday and Tuesday for meetings with a special insurance committee appointed by Lt Governor Amy Tuck.

They hope to find some compromise solution that would keep wind pool insurance available, but also affordable, to everyone who needs it. Otherwise, they say, this 268 percent increase which takes effect October first will have a devastating effect on South Mississippi's economic recovery.

by Don Culpepper

Powered by Frankly