Residents of Mobile and Baldwin counties who are shopping for homeowners insurance today find that their choices are increasingly not the familiar names of State Farm, Alfa and Allstate, but instead names like Lexington, Lloyd's, Scottsdale and GeoVera.

The new insurers pushing into the area are not only different companies, but also companies writing in a different kind of market. While most familiar companies are fully under state regulation, most fast growing companies are "surplus lines" companies, subject to much less over sight by the Alabama Department of Insurance.

"I think it's going on all over the Gulf Coast and Atlantic coast," said Bill Wilson, head of research for the Independent Insurance Agents & Brokers of America, a trade group for insurance agents who aren't tied to any one company.

A combination of factors is pushing the market shift. The state's dominant insurers fear the losses they could suffer on the coast in the event of a severe hurricane, leading them to refuse new business and in some cases not renew existing policies.

At the same time, surplus lines, traditionally more expensive, are becoming price competitive for homeowners, some brokers and industry experts say. Investors have poured billions into new insurance ventures, particularly reinsurers, since 2005's Hurricane Katrina. By 2007, that new money was cutting the cost of insurance from these less-regulated carriers, which are far quicker in responding to market changes.

"Right now, the rates that are being written are competitive," said Bruce White of Gulf Shores-based Whitehaven Insurance Group.

A new marketplace

For at least the last 15 years, it's been difficult for homeowners very close to the beach to buy policies from traditional insurers, forcing them to turn to either the state's insurer of last resort, the Alabama Insurance Underwriting Association, or to surplus lines companies. Over time, local brokers built expertise in dealing with surplus lines companies, including syndicates based in the Lloyd's of London market, as well as branches of industry behemoths such as American International Group and Nationwide Mutual Insurance Co.

Now, the surplus lines companies and their brokers are spreading away from the beach as traditional insurers pull back. For example, White said his company started selling policies north of Gulf Shores for the first time last year, after it worked out a deal with its Lloyd's syndicate to sell up to $10 million worth of coverage in every ZIP code in Mobile and Baldwin counties.

The amount of premiums collected by surplus-lines companies in Alabama has more than doubled since 2001, according to state tax figures, rising to $541 million last year. Regulated insurers collected more than $1.12 billion in homeowners premiums alone in 2007, and billions more in other kinds of regulated insurance.

Regulators see the growth of surplus lines companies as both good and bad. Good, because they're making policies available where otherwise there might be none, plus paying a 6 percent premium tax, about double what regulated companies pay. But bad, because policy holders are more at risk if a company fails, and could find unpleasant surprises in their policy language, or from a quick cancellation.

"Certainly it's not what we would prefer, but during the instability of the market now, we're certainly happy they're here," state Insurance Commissioner Walter Bell said last month.

Buyer beware

Buyer beware starts with the fact that surplus-lines companies don't submit their policy forms to the state. That means purchasers have to check, or get their agent to check, what a policy really covers.

It's also possible that a surplus lines company could cancel or non-renew a policy more quickly than a state-regulated company. Admitted companies have to notify the commissioner 150 days before canceling policies en masse, said Ragan Ingram, deputy insurance commissioner.

People who buy a policy from a surplus-lines company also aren't protected by the state guaranty fund, which covers at least some of what's due policy holders if a regulated company goes belly-up. Regulated companies pay

1 percent of premiums each year to the fund.

That means buyers should check the financial strength ratings put out by A.M. Best and other rating groups

"The likelihood of any given insurer going under is fairly remote, but the lower the rating, the more likely it is," said Bob Hartwig of the Insurance Information Institute.

White says that his agency is able to match or go below the prices of traditional insurers in some areas, though his company may have stricter underwriting criteria. He said that 10 miles inland, his agency can write policies for 50 cents per $100 of value. In 2005, traditional insurers were averaging at least 68 cents per $100 of value statewide, according to figures from the National Association of Insurance Commissioners.

Others who sell surplus lines agree rates are falling, even if they say theirs haven't gotten that low. J. Taylor Norton, an agent with Southern Alabama Insurance in Gulf Shores, said homeowners rates through his agency have fallen between 15 percent and 25 percent since November. Even so, Norton says traditional insurers are probably a better deal.

"If they can get coverage through the standard market, then that's where the homeowner needs to go," he said. "Price and coverage-wise, more of the time the standard lines market have a more complete policy."

But with the state's top three home insurers restricting new coverage along the coast, surplus-lines companies are likely to keep expanding.

"The standard markets don't want to take the chances these surplus lines carriers want to take," White said.

Do we care about the coast?

?T he debates about the future of the beaches of Dauphin Island have now reached the point where I wonder if we care enough to save what we love about coastal Alabama.?I say that because cm MDSH in spite of a recent report to the contrary cm MDSH the truth is, we are destroying the beaches of Dauphin Island.?By not artificially bypassing sand dredged from the south end of the Mobile Ship Channel, we are also increasing potential hurricane storm surge and wave damage in the Bayou La Batre area, undermining the Dauphin Island Lighthouse, and causing tremendous changes to the ecosys tem of the south end of the county.?These include killing the most productive oyster reefs in the state and increasing erosion of the extremely productive wetlands of the Mississippi Sound.? In essence, we are needlessly ruining south Mobile County to save a few bucks.?The solution is clear:?--The Port of Mobile, or some other local or state agency, should fund the additional costs required to put dredged sand back in the beach system.?--Dauphin Island should open access to its beaches to all of the citizens of Mobile County so that this expense is more politically acceptable.? The sand that comprises the beaches of Alabama flows, in some respects, like a river of sand along the Gulf shore in response to waves. Most of that movement is to the west until the sand reaches an inlet, or "pass," like Mobile Pass cm MDSH the water between Fort Gaines (on Dauphin Island) and Fort Morgan.?There, the sand should naturally "bypass" to the western beaches by getting pulled out onto a sand bar or shoal system by the outgoing tides, and then getting driven back to the beaches by waves to continue its journey to the west. At Mobile Pass, however, the sand falls into the south end of the Mobile Ship Channel, where it is dredged and disposed of in deep water beyond the beach system.?Instead of that wasteful disposal practice, we should have been artificially bypassing the sand to the downdrift beaches in order to replicate the natural process that's interrupted by the ship channel. That is a basic principle of prudent coastal management, and it is sound coastal engineering practice.?By not following that basic principle, well over 20 million cubic yards of sand have been permanently removed from the beach system of Mobile County by the ship channel dredging practices.?This is a tremendous amount of sand. If we had hauled that sand up to the city of Mobile to build a sand castle, we could have built one the size of the new RSA Battle House Tower and 100 more just like it.?But instead, we dumped the sand offshore and essentially starved the shoals around the lighthouse and the beaches of Dauphin Island.?The U.S. Army Corps of Engineers' 1978 report about Dauphin Island and the dredging problem correctly and prophetically said that if we did not start artificially bypassing sand, then "erosion would continue to claim valuable property on the island, ultimately causing hardships for island property owners and a lessening of the area's attractiveness for recreational activities."?All of that has occurred and more. A 1992 report by the University of South Alabama also warned of the problems brewing on the island due to the offshore disposal of dredged sand. As the primary author of that report, I never thought things would get this far without being fixed.?Dauphin Island experiences tremendous natural changes because it is a barrier island next to a very large inlet. Most shoreline fluctuations nationwide occur in similar locations.? The presently ongoing migration of Pelican/Sand Island onto Dauphin Island at the fishing pier is one such example. This is geology happening right before our eyes.?The same thing happened around 1710 and again around 1860, so it seems to be a 150-year cycle.?But the recent report by a consultant to the U.S. Army Corps of Engineers tries to conclude something that is physically impossible. Why is it impossible? Because another principle of coastal engineering is a "sediment budget," not unlike your personal budget, where we keep track of sand moving into and out of an area.?If more sand comes in than leaves, you have widening beaches. But if less sand comes in than leaves, your beaches will erode. The dredging is like a continuing series of large withdrawals from your checking account.?And this consultant's report is arguing that you are broke because you have always spent money, and not because he has been taking the withdrawals from your account.?Every cubic yard of sand removed by dredging is a cubic yard of erosion downdrift in the river of sand.?It is telling that the report was supposed to have had a co-author but that co-author could not agree with the impossible and wrote in a dissent that the report was "inconclusive, at best." This dissenter is the most highly-regarded coastal engineer in the nation and has been a member of the National Academy of Engineering for decades because of his seminal contributions in the field.?One question that I am often asked is, "Why do we not just put the dredged sand back on the beaches?" The answer, of course, is money. It will cost more to place the sand back on the beaches, or in shallow water so that waves move it to the beaches, than to dump it in deepwater.?That's because ocean-going dredges are very efficient at moving large amounts of sand. But the additional cost of doing the right thing here is very small compared with the overall cost of dredging cm MDSH and with the cost of the damage being caused.?So, who has benefited from these harmful dredging practices? We have, in that we have all benefited from the positive economic impact of the Port of Mobile.?This is not like the so-called "water wars" with Atlanta, wherein another sovereign state (Georgia) wants to take and use some of the water on its way to Alabama. We have fought a 20-year legal battle to protect our water rights.?But in this case, we in Mobile County are taking and throwing away 100 percent of the sand that was on its way to south Mobile County. We are only hurting ourselves.?We can have a great port and a healthy barrier island system. Indeed, we must.?Question is, do we care? Do we care enough about the beaches and property of Dauphin Island, the fate of the Sand Island Lighthouse, the marshes of south Mobile County, the oysters and the other fisheries, and the future vulnerabilities of Bayou La Batre and Coden to hurricanes??Or are jobs, jobs and more jobs cm MDSH at any expense to our environment and our quality of life cm MDSH the only thing we care about anymore??