Written by Jesse Scheckner on March 16th, 2021
Florida homeowners with rooftops 10 years or older could reduce their replacement coverage with now-advancing bills in Tallahassee that would significantly change the state’s property insurance rules.
In a rare move, all 13 Miami Dade commissioners added their names to a resolution by Joe Martinez opposing Laws SB 76 and HB 305, tabled by Senator Jim Boyd of Bradenton and Rep. Bob Rommel of Naples, respectively .
State law now requires insurers to offer residential property customization based on replacement cost. The Florida Office of Insurance Regulation may approve insurance forms that adjust roofing losses based on net present value, among other things, due to depreciation. However, before issuing the policy, insurers must offer an adjustment to the replacement costs on the roof.
Under the new rules proposed in the bills, if a homeowner’s roof is at least 10 years old and destroyed by a hurricane, an insurer could only pay for what the roof was worth at the time, rather than the full replacement cost.
The lifespan of roofs in Florida varies widely, according to the International Association of Certified Home Inspectors.
Aluminum-coated roofs only last two to six years. Those made of asphalt can hold off the elements for 15 to 20 years without deteriorating. Wood lasts about 25 years. Copper, slate, and clay have performed well for more than 50 to 80 years.
“Forget the fact that you paid your full insurance for a replacement roof and you’re not getting a refund – you just stop. They pocket the money – but most roofs last 25 to 30 years, ”Martinez told Miami Today. “Each roof costs at least $ 35,000. Insurance may pay you $ 7,000 to $ 10,000. What will seniors do if they live on a steady income? What about couples who just overwhelmed themselves to buy their first home? You will either have to refinance, get a second loan, or live with a blue tarpaulin or leaks because the money won’t be there. “
Of around 60,000 homes in his district, Mr. Martinez said about 48,000 have roofs that are more than 10 years old, according to information from the district’s real estate appraiser. Assuming the ratio spanned nationwide, 80% of Miami-Dade’s 757,322 residential properties – 605,858 apartments – would not receive full roof replacement coverage if either bills passed.
“The biggest expense when we are hit by a hurricane is the roof. Insurance companies pay the most there, ”he said. “I can see why you don’t want that. What I can’t see is why anyone elected to represent people in Florida would do so to help an industry and hurt its residents. “
It’s not that simple, said Sen. Boyd, who is also CEO of Boyd Insurance and Investment, which offers both business and personal insurance, including homeowner and rental insurance.
The reason he came up with the bill, he told Miami Today, is because Florida’s property insurance market is facing a “crisis” where “almost every domestic freight forwarder … has lost money and prices to the consumer – policyholders, ours Voters – continued to rise. “
In many cases, homeowners are seeing their insurance policies increase by as much as 60%, he said, adding that his own renewal policy increased 40% in March.
The development is relatively new. In 2016, only six of 64 tariffs filed with the Florida Office of Insurance Regulation rose 10% or more. This is evident from a graph the agency showed state lawmakers in January.
Last year, 55 of 105 rates submitted were intended for double-digit increases, the agency said.
A big reason for this, Senator Boyd said, is “frivolous and unprecedented lawsuits” from “rogue attorneys and roofers” seeking a full roof replacement if only a small portion of the roof is damaged.
“As for our bill, it is trying to put some expectation there in terms of the life of the roof and the availability of insurance to cover roof damage,” he said.
It also aims to end lawyers’ fee multipliers associated with claims that it believes have become exorbitant. Of the $ 15 billion insurance companies paid out to Floridians since 2013, 71% went to attorneys and fees, while only 8% went to applicants.
“Something is wrong with this picture,” he said.
He claims Florida has become inhospitable to insurance companies that would otherwise come here, reducing competition and driving up prices. Tackling high legal fees and reforming certain coverage policies will make Florida more attractive to airlines.
While what is going on is in no way the fault of the consumer, there are misconceptions about the role insurance companies should play.
“Many have been led to believe and see evidence that insurance is a guarantee rather than an insurance policy [for when] You have a disaster, ”he said. “If you have a 20 year old roof, it’s 19th year and you’ve damaged 10% of your roof. Is it really fair to expect 100% of your roof to be replaced? In essence, that’s exactly what happens. “
Mr Rommel did not respond to several requests for comment.