Construction projects along Florida's coastline worth about $4.5-billion got a sizable reprieve Friday when Citizens Property Insurance decided to reverse itself and not end its builder's risk insurance program.

The program offers windstorm protection for about 6,000 residential and commercial buildings under construction or being renovated in Citizens' high-risk, or coastal, areas. Most lenders require the coverage, so builders who get loans must insure their projects.

But last month, Florida's insurer of last resort, which has ballooned to become the largest property insurer in the state, decided to phase out the program because the law does not require Citizens to provide it.

That decision raised serious concerns throughout the state's construction industry. And in a saga similar to what is occurring in the residential and commercial property insurance arena, builders said only a few private insurers are willing to write new policies or renew old ones, leaving many projects in danger of shutting down.

The Citizens board of governors responded Friday by voting unanimously to continue to renew policies and write new business until Dec. 31.

"We are doing this," said board of governors chairman Bruce Douglas, "because the economy of Florida needs some interim plan. We will not cancel any existing policies."

The vast majority of Citizens' builders risk policies are in coastal Broward, Palm Beach and Miami-Dade counties. The Tampa Bay area accounts for about 150 policies, most of them in Pinellas and Pasco counties.

"It's something that needed to be done, and it's a shame they entertained the idea of eliminating it to begin with," said Joe Narkiewicz, executive vice president of the Tampa Bay Builders Association.

While coverage is scarce in the regulated market, some builder's risk insurance is available through unregulated surplus lines companies, although coverage there is also hard to find and premiums can be several times higher than what Citizens charges.

"The carriers who do business in this area don't offer wind coverage," said Narkiewicz. "And surplus lines is not something you can count on.

"So without Citizens, either construction doesn't start or it comes to an abrupt halt."

Douglas said the Citizens board will re-examine the issue at its November meeting to determine what happens after Dec. 31. But the circumstances may still be the same.

"As I see it today, I don't see an influx of new capacity from now until November," said Ken Jacobs, senior vice president for commercial lines at Clearwater insurance brokerage firm Acordia.

But at least for now, the work goes on.

"They (Citizens) had to reopen it up because there's such a lack of capacity," Jacobs said. "I have a client trying to do a condo project, and without Citizens, I don't know what they would've done.

"Now, hopefully, the project is back."

Board members also agreed Friday to extend coverage to about 70 continuing-care residential centers in the state.

The board said the centers, which often have largely residential structures that also house medical or rehabilitation centers, would be eligible for coverage as commercial-residential structures.

But the coverage would be limited to buildings where at least 75 percent of total building space is defined as residential.

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.