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Residents Explore Unorthodox Insurance Solution


Several hundred Century Village East residents recently attended a meeting seeking information on an alternative to paying the rising costs of building insurance.

The meeting was organized by City of Deerfield Beach Commissioner and village resident Bernie Parness and featured a presentation from a man pitching the idea of village buildings starting their own insurance company to insure their buildings.

Self-insurance is when a group decides to create their own pool of money to cover losses. The idea would be to create a company that covers all the buildings in the Village. Each building would pay into the pool instead of paying insurance premiums to an outside company. The pool would then cover any claims from the buildings.

While supporters didn’t cite any example of the idea currently covering residential condominiums in Florida, they say the model is based on cooperative insurance pools used in the agricultural industry to cover farmers.

Materials distributed to residents said, “Century Village has the size to aggregate its premiums and form their own property insurance operation to stabilize and potentially reduce property premiums.”

According to numbers provided at the meeting, a $600 per unit payment into the pool would create a $5 million dollar fund to start the effort. This would replace the cost of paying a third-party insurance company.

Some at the meeting expressed skepticism about the idea. An insurance company only works if it can spread risk among a large pool of insured. For example, while a large company my collect premiums from clients across the entire state of Florida, it counts on the fact that only a small percentage of its clients might get hit with a major hurricane.

However, if a company only covers the Village, then the chances of every client being hit by a storm at the same time is very likely. Some ask if the pool of money would be large enough to cover every building at the same time.

Others wondered how any system that relies on 254 independent associations all working together and agreeing to drop their current insurance could possibly succeed.

Commissioner Parness said he organized the meeting because, given the rising costs to residents, it’s worth exploring any idea that could help. He was critical of COOCVE, and specifically COOCVE President Carol Freedman for what he said was a refusal to meet to learn more about the idea.

“Pay or move,” Parness told residents during the meeting. “That is what COOCVE doesn’t want you to know about the current state of insurance.”

COOCVE said “self-insurance is unlikely to provide a viable solution.”

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