Transcript Windstorm Insurance Rates Create Crisis in Monroe County

Hurricane
Preparedness Summit
An Update Prepared by the
Grassroots Organization FIRM
Fair Insurance Rates in Monroe
June 2, 2008
Outline
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Background
2008 Legislative Session
Future Goals
Practicalities
Insurance Preparedness
 CPIC Claims Handling Changes
 Mitigation
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Questions & Answers
Slide 2
July 20, 2015
Background – What’s FIRM?
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Grassroots group founded in February 2006
Grown from 32 neighbors in Key West to 5,000 members
Keys-wide
Run by volunteers and funded by donations
Currently a 501(c)(6) organization
 Not-for-profit, but donations are not tax-deductible
 Allows us to advocate and educate
Successfully worked to lower windstorm rates for Monroe
residents and for insurance reform statewide
OUR MISSION: “To advocate for, promote and encourage the promulgation of fair,
impartial and actuarially sound windstorm insurance rates for owners of commercial and
residential properties within the geographic boundaries of Monroe County, Florida.”
Slide 3
July 20, 2015
2008 Insurance Legislation
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CPIC rate freeze extended until January 1, 2010
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New 2010 rates must be actuarially sound
“Use and file” repealed until January 1, 2010
Homestead distinction eliminated
CPIC may offer wind-only coverage where not
available in the private market
CPIC Coverage exemption now applied to twomillion dollar homes
Slide 4
July 20, 2015
2008 Insurance Legislation
(continued)
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Greater transparency required
 CPIC rates must be vetted through Florida Public
Hurricane Model
 Private firms must share “trade secrets” with OIR
 OIR must have access to all factors used in ratesetting
 Consumers must have access to rate-filings via
website
 Consumers who challenge claims must have access
to all their files
Slide 5
July 20, 2015
2008 Insurance Legislation -- Additional Provisions
Citizens Property Insurance Corporation
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Consumers cannot be “taken out” of CPIC if the
premium of the new provider would exceed that of CPIC
by 15% or more
Coverage of manufactured and mobile homes built
before 1994 will be limited to cash value (not
replacement value)
Consumers must have 180 days’ written notice of
cancellation
CPIC may not file an administrative review or judicial
challenge to an OIR finding
A task force will be convened to return CPIC to its
former status as an insurer of last resort
Slide 6
July 20, 2015
2008 Insurance Legislation -- Additional Provisions
Citizens Property Insurance Corporation (continued)
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As of January 1, 2009, any home with an insured value of
$750,000 or more must have shutters to be insured by
CPIC.
As of January 1, 2011, any buyer of a residential property
(regardless of insured value) located in the windborne debris
region must receive a written disclosure of the structure’s
“windstorm mitigation rating” from the seller.
A prior stipulation that homes constructed after January 1,
2009, within 2,500 feet of the shoreline must be built to
“code-plus” standards in order to be insured by CPIC has
been eliminated.
Slide 7
July 20, 2015
2008 Insurance Legislation -- Additional Provisions
Citizens Property Insurance Corporation (continued)
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Assessments to cover existing CPIC deficits will now kick in when
CPIC deficits exceed 6% of their projected direct written premium for
that year.
Emergency assessments may be required when/if regular
assessments are insufficient to recover the existing deficit, and may be
levied for as many years as necessary to eliminate the deficit. Such
emergency assessments may not exceed 10% of the amount required
to eliminate the deficit or 10% of the statewide premium, whichever is
greater.
If a new deficit is incurred after 2008, all CPIC policyholders may be
levied a surcharge of up to 15% for a period of 12 months to cover the
deficit.
Should CPIC actually collect surcharges in excess of any deficits, the
excess will remain with CPIC to offset any future deficits (and the
potential for any future surcharges or assessments).
Slide 8
July 20, 2015
2008 Insurance Legislation -- Additional Provisions
General Property Insurance Providers
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Mitigation
 Commission will bring consistency to application of
mitigation credits pursuant to the uniform home
grading scale by February 1, 2011
 As of January 1, 2010, anyone purchasing a home
over $500,000 in insured value must receive written
disclosure from seller of the structure’s “windstorm
mitigation rating.”
Insurers must pay undisputed claims amounts within
90 days of receipt of the claim
Slide 9
July 20, 2015
2008 Insurance Legislation -- Additional Provisions
General Property Insurance Providers (continued)
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Capital Build-Up Incentive Program
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Slide 10
allows start-up companies to build the capital
required to satisfy regulatory standards of solvency
by taking funds from the state in exchange for
surplus notes from the insurer
open to insurers that commit to increasing their
writings of property insurance, including wind
July 20, 2015
FIRM Next Steps
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Work with FIU to determine if Monroe County
factors are accurately addressed in the FPHM
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Factors include:
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Construction history (building code, height restrictions)
Geography (linear island string, undeveloped mainland)
Meteorological history
Topography (wind versus flood)
Construction costs (labor and materials)
Will address:
• Residential dwellings
• Condominiums
• Commercial properties
Slide 11
July 20, 2015
FIRM Next Steps (continued)
Monitor all rate filings
 Participate in ongoing and new task forces
 Work for permanent repeal of “use and file”
 Lobby for dedication of windfall sales tax for
hurricane-related uses
 Work towards a federal catastrophic
mechanism, similar to flood insurance
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Slide 12
July 20, 2015
Practicalities –
INSURANCE PREPAREDNESS
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Take detailed, dated photographs of your home
and belongings prior to hurricane season
 Provide a set to your insurance agent
 Secure a set in a waterproof container
Gather all paperwork (deeds, drawings, plans,
receipt) related to your dwelling and secure in a
waterproof container
Review your policy with your insurance agent to
make sure coverage is appropriate
Slide 13
July 20, 2015
Practicalities – CPIC CLAIMS
HANDLING IMPROVEMENTS
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Significantly increased claims handling staff
Moved to electronic claims handling
Educated outside adjusters in advance of
hurricane season
Created mobile units to respond quickly
Empowered field adjusters to distribute ALE
checks on site
Built redundancy into call handling centers
Slide 14
July 20, 2015
Practicalities- MITIGATION
Mitigation factors all work together to save you
money. There are four significant factors
that can reduce your premium:
 Shutters. Class A, B or C shutters can save
you up to 33%.
 If your home is compliant with the current
Florida Building Code, either through new
construction or renovation, you may be able
to save up to 45%.
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July 20, 2015
Practicalities – MITIGATION (continued)
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Roof Discounts.
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How your roof is connected to your walls can save
you money. Hurricane straps are a big help.
July 20, 2015
Practicalities – MITIGATION (continued)
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Roof Discounts.
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Slide 17
How your roof is covered can also
save you money. A small mitigation
credit is available for metal roofs.
However, there is no pre-designated
space on insurance applications to
account for these discounts. Ask
your agent to make a special note if
you have a sheet metal roof to
qualify for a discount.
FIRM continues to advocate for
greater discounts for metal roofs due
to their superior performance.
July 20, 2015
Practicalities – MITIGATION (continued)
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Construction. A hip roof may save you up to
23%.
SIMPLE HIP ROOF
A gable roof with the ends
brought together at the same
pitch as the rest of the roof.
Slide 18
PYRAMID HIP ROOF
A hip roof built on a square
base with eaves of the same
length.
July 20, 2015
CPIC Policyholder Forum
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Thursday, June 12, 2008
4:00 to 7:00 p.m.
Harvey Government Center in Key West
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Forum will be taped and broadcast on the
government channel
Attendees will include:
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Slide 19
Insurance Commissioner Kevin McCarty
Representatives from CPIC
FIRM
You!
July 20, 2015
Get Information at:
www.FIRMkeys.org
Slide 20
July 20, 2015