Home insurers revoking discounts for hurricane-proofing
Many Florida homeowners shelled out thousands of dollars to fortify their homes against hurricanes in recent years to qualify for insurance discounts.
Some got them – for a while. This year, some homeowners are feeling the impact of changes to state laws that, in effect, reduce or erase many insurance discounts.
Howard Goldberg’s windstorm insurance premium dropped 33 percent in 2009 when St. Johns Insurance accepted an inspection report that showed his Delray Beach house has shutters and steel-reinforced garage and front doors.
His premium went up slightly when he renewed in December. The real shock came eight months later, when St. Johns re-calculated his rate, rejected some of the improvements, and raised his premium 69 percent, retroactively.
Insurers said homeowners were fraudulently claiming improvements for discounts. Changes that took effect this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and a signature of a licensed engineer, architect or contractor to verify the accuracy.
Some insurers have started going back to verify the discounts are legitimate.
State-backed Citizens Property Insurance, the state’s largest home insurer, began reinspecting homes last year to verify the $700 million in discounts it provides annually. “Our goal for re-inspections is to have the features so well documented that the construction feature is apparent,” said Candace Bunker, spokeswoman for the state-backed insurer.
“If a homeowner complains and believes we are taking away a legitimate credit, we work to make sure that we have correct information, that our action is warranted, and to communicate to the policyholder about how any deficiencies can be remedied if they wish to continue to receive the credit.”
State leaders have stressed the importance of making homes stronger and invested more than $200 million of taxpayer money to do so through the My Safe Florida Home program from 2006 to 2009.
Bob Hunter, insurance director of the Consumer Federation of America, says regulators should intervene before people start doubting that insurers give discounts.
“There can’t be any question that they’re being applied fairly,” Hunter said. “I think the insurance commissioner should immediately look into these kind of allegations and…reverse any of these decisions” to lower discounts if they’re wrong.
What are they looking for if you get selected for a reinspection?
The inspector will look for several things in the reinspection process. Keeping your credits is all about verifying what credits you have and having the right paperwork available.
Is the structure reinforced? The inspector is supposed to check with a metal detector in at least one location per side of the house to see if there are reinforcing rebars present in the masonry walls.
Roof geometry. Is the roof a full HIP roof or does the roof have gable ends or is a part of the roof flat?
A full hip roof has been shown in wind tunnel tests to better withstand hurricane force winds than a gable or flat roof. One important point is that a flat roof that is not attached to the rest of the roof structure such a some carports or Florida rooms should not be counted. Confirm with the inspector what he is figuring as part of the roof area.
Roof covering. The roof covering has to meet 2 requirements.
First, it has to be installed per the Florida Building code. Have a copy of the building permit avaialbel for the inspector.
Second, the roof material has to have a Miami Dade product approval or Notice of Acceptance (NOA). Only shingle roofs and metal roofs have met this second test. That means that all flat roofs and all TILE roofs do not meet with the Office of Insurance Regulation (OIR) requirements. If you don’t have an NOA for the roof your roofer or his supplier should be able to assist you in obtaining one.
Verify hurricane opening protection.
Are ALL openings protected with devices that can be VERIFIED as being Miami Dade Product approved? Many hurricane windows, doors, shutters or storm panels have manufacturers data labels or stickers on them. Be aware of where these stickers are – show them to the inspector. Have a copy of the Notice of Acceptance (NOA) number on the stickers available for the inspector. There should be a separate NOA for each type of window and door opening. So a house with sliding glass doors, fixed windows, casement windows, a glazed panel in the front door and a French door would have 6 NOA’s for glazed opening protection. The original installer or supplier of the windows and doors should be able to assit with obtaining the NOA paperwork if the homeowner can’t find the stickers on every opening.
Even one uprotected door or window is enough to reduce the hurricane credit for that category. An unprotected garage door with windows or lites across the top, or an unprotected front door with a glass insert can remove all of the credits for both glazed and unglazed openings.
The attic is important in reinspections.
The inspector should check 4 trusses with a metal detector to check the nail spacing where the roof deck is attached to the trusses. Checking 4 trusses assures that the nailing of both the edge of each sheet of plywood and the center of each sheet has been correctly nailed. There is not much a homeowner can do about this except make sure that 4 trusses in a row are surveyed and marked so they can be re checked later.
The inspector should also find a nail which has missed the truss. these nails, called shiners, should be measured. 2″ of nail showing through the plywood deck is an 8d nail and 1.5″ is a 6d nail. Again there is not much a homeowner can do about this. One thing that is important is that the nail may have been driven at an angle. If it was driven at an angle less than 2″ showing may still be an 8d nail. Confirm this with the inspector.
If the roof has gables the inspector needs to verify how they were constructed. Are the gables masonry all the way up or are they frame construction? If they are frame construction, are they braced? If this becomes an issue the homeowner may need to contact an engineer to verify the construction details.
How is the roof anchored to the rest of the building? Generally the roof is secured either with a “wrap” or “clip”. What the carrier wants from the inspector is a photo showing not just the attachment device, but the number of nails in the wrap or clip. The inspector needs to crawl all the way to the outside edge of the attic and take a photo of the attachment. The problems that arise are when the attic is small and dark and the inspector can’t get a good photo of nails securing the wrap or clip.
If the carrier removes any wind mitigation credits unreasonably it is possible to get them back. Generally all a homeowner has to do is provide the correct back up documentation. Copies of permits, NOA’s and either better photographs or professional letters from a contractor, window protection installer or licensed roofer can be used to correct any disputed credits that are removed. If a credit was removed that should not have been removed the carrier should give back the credits retroactively.