Erin Gives Floridians Drill In Hurricane Readiness

SOUTH Florida officials are calling hurricane Erin a good ''test run.''

As another hurricane season begins, Floridians have shown that they are prepared to board up windows and seek higher ground. But state insurance companies still lack an adequate emergency fund, leaving some underwriters vulnerable to bankruptcy in the case of a particularly strong storm.

Erin spared South Florida its 85-mile-per-hour winds and heavy rains, hitting land just south of Vero Beach. It did, however, cut off power in Orlando as it rumbled on toward the panhandle.

Residents from the Keys to Palm Beach worked to avoid a repeat of hurricane Andrew, which caused $16 billion in destruction.

''Hurricane Andrew taught us a lot,'' says Katie Hale, director of Dade County's Emergency Management Team. ''It showed with Erin, and it will be even more evident in the next storm that heads our way.''

Thousands of residents flocked to supermarkets, gas stations, and hardware stores for last-minute supplies. Phone lines were jammed. Most businesses, government offices, and schools closed for the day.

Gov. Lawton Chiles (D) declared a state of emergency and the Florida National Guard was put on alert.

While most Floridians took standard precautions and inland hotels filled up, most residents living in coastal areas ignored an evacuation order, saying they intended to weather the storm at home.

''I went through Andrew and experienced 140-mile-per-hour winds,'' says Jill Brooks of Bay Harbor Islands. ''Unless this storm gets worse than forecasters are saying, I'm staying put.''

Insurance companies also braced for Erin by placing agents and adjusters on alert and by closing the door to new business. Insurance companies typically stop writing new policies once storm warnings are posted, to prevent homeowners from buying coverage at the last minute.

Perhaps the biggest insurance concerns focused on the Joint Underwriting Association (JUA), a pool set up by insurance companies that provides coverage for more than 767,000 homeowners. The JUA only has about $200 million in cash that could be used to pay claims in the event of a major storm like Erin. Once the JUA's supply of ready cash is exhausted, policyholders may have to wait until mid-August or longer for payment of their claims. The JUA's plan for raising cash depends on a $1.5 billion line of credit, which won't be in place until mid-August.

''We could probably handle things for a few weeks,'' says Jay Newman, executive director of the JUA, which was created in 1992 to accommodate residents who couldn't get insurance. ''But it's not a desirable situation to be in.''

State Insurance Commissioner Bill Nelson has voiced concern about the JUA's ability to pay claims in a major disaster.

''If we have a major storm, we don't have any cash in the JUA,'' says Mr. Nelson. ''We could have economic collapse in South Florida.''

Hurricane Andrew's destruction caused nine insurance companies to go out of business, and the insurance industry has forecast more closures if a powerful storm hits Miami or Fort Lauderdale.

''A $50 billion hurricane would wipe out 25 percent of the industry's surplus,'' says Terrie Troxel of the Insurance Research Council, based in Wheaton, Ill. ''That could put many more insurance companies out of business, as hurricane losses are not evenly distributed.''

AS a result of insurance concerns, many people living in hurricane-prone areas have retrofitted their homes since Andrew. In addition, building-code standards have been raised by communities throughout South Florida for new homes. Perhaps more important, a new state insurance law now requires insurance companies to rate a community's building code and enforcement, and to give a discount in places where standards are high.

Those laws and the memories of Andrew have made a noticeable difference. Businesses all along Miami streets have used recently installed storm shutters for the first time. High-rise apartment buildings on Miami Beach also put their hurricane shutters to use. And for those homes and businesses that did not have storm shutters, plywood covering over windows was a common sight.