Can you afford to replace your roof?
Will you have to pay out of pocket? Why is this happening?
So what happened?
More and more insurance companies are no longer writing policies in Florida and the ones that are, their prices are skyrocketing. The reason points to several issues:
- Insurance companies have been running a deficit over past hurricane claims, such as Irma
- Material costs are increasing
- Local contactors soliciting homeowners to file a claim
"Florida accounts for only 8 percent of the nation's property insurance claims but 76 percent of the nations property insurance litigation" CEO, Florida Chamber of Commerce
- Attorney fees for lawsuits filed by local contractors and homeowners when claim not approved.
What has been done to try and combat these issue to bring more insurance companies back to Florida and with lower rates?
On June 11, 2021 Gov DeSantis signed SB 76 into law. What does this law do?
- Allow insurance carriers to limit coverage for roofs more than 10 years old.
- Make the recovery of attorney fees and costs contingent on obtaining a judgment for indemnity company.
- Reduces the claims deadline on all claims to two years from the date of loss.
- Requires plaintiffs to file a pre-suit demand at least 10 days before filing a lawsuit against an insurer that includes an estimate of the demand dispute
- Disallows pre-suit notices to be filed before the insurance company can make a determination of coverage.
- Allows an insurer to resolution after receiving notice.
- Also makes it illegal for roofing companies & contractors to solicits homeowners to file a claim.
Insurance companies contend they are treated like ATMs by contractors. In the first half of 2021 44,325 lawsuits were filed against insurance companies primarily by contractors on behalf of the homeowner. Contactors seek out homes with roofs over 10 year old and solicit the homeowner for an inspection with the intent of finding 25% damage from a recent storm, so the contactor gets a new roofing job and tells the homeowner it is free as it is covered under their insurance. But this leaves all homeowners paying higher premiums and now, honest homeowners, under the new law, having to pay out of pocket to replace their good roof, if it's over 10 years old, to keep their insurance. (Current state building code requires full replacement of any roof with more than 25% damage)
Most agents are telling people "If you get a renewal notice, take it and don't worry about the premium increase."
The hope is with this legislation, more companies will start writing policies again and with lower rates. It may be that having an older roof will still be covered by some insurance companies, with an added clause, for an additional premium of course. But their was an immediate downside; shortly after the bill passed, the state regulator approved three Florida insurers' request to drop more than 50,000 homeowners policies, as our state was heading into hurricane season.
What can I do?
Take your renewal, if offered! If you have been dropped, you may need to look into shelling out $12-$15k (asphalt shingles) for a new roof, more for other roof types, to get your insurance coverage back. This is even if your inspection tells you, your roof still has 20 years of life left.
Per the Roofing Journal, "Insurance professionals surveyed...don't expect companies to relax roof age restrictions until recently passed reforms can lower the cost of roof replacement claims and other costs incurred by contractors and lawyers."
Currently, MILLIONS of homeowners in Florida have roofs over 10 years old!
O'Connor, Amy (2021, June 1) Insurance Journal:Too Little, Too Late? Breaking Down Florida's Latest Property Insurance Reforms <https://www.insurancejournal.com/news/southeast/2021/06/01/616457.htm>
Simpson, Andrew (2021, June 1) Insurance Journal:Newly-Enacted Florida Property Insurance Reform Bill Said to Be Already Working <https://www.insurancejournal.com/news/southeast/2021/06/11/618364.htm>
Hurtibise, Ron (2021, Mar22) Sun Sentinel:You might not lose your full roof replacement insurance after all <https://www.sun-sentinel.com/business/fl-bz-insurance-legislation-update-20210322-da3zv4ehynasnd4di4yokylsuq-story.html>
Cezian, Aura (2021, Jul 25) Can you afford a new roof? If not, you might not be able to find home insurance <https://roofing-journal.com/can-you-afford-a-new-roof-if-not-you-might-not-be-able-to-find-home-insurance/>
Corporate (2021, Feb 23) Insurance Litigation Group:Homeowners Beware: SB 76 & HB 305 Do NOT Benefit You! Here's Way... <https://restorationlaw.com/homeowners-beware-sb-76-hb-305-do-not-benefit-you-heres-why/>