Transcript Windstorm Insurance Rates Create Crisis in Monroe County

March 2008 FIRM
Townhall Meetings
Prepared by the Grassroots
Organization FIRM
Fair Insurance Rates in Monroe
March 2, 2008
Agenda










Welcome
Background
Accomplishments
Work in Progress
2008 Challenges
Task Force on Citizens Claims Handling and Resolution
Statewide Windstorm Mitigation Advisory Committee
2009 Changes in Windstorm Eligibility
Questions & Answers
Conclusion
Slide 2
July 20, 2015
Background – What’s FIRM?




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
501(c)(6) organization
 Not-for-profit, but donations are not tax-deductible
 Allows us to lobby
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
Accomplishments




Brought attention to statewide windstorm insurance crisis
Successfully challenged Citizens Property Insurance
Corporation (CPIC) 2006 rate filings which would have
produced rates in excess of $30/$1,000 of coverage for Keys
property owners.
Convinced Office of Insurance Regulation to roll-back
Monroe County rates by 32% (effective rate = $13.58/$1,000
of coverage. (expires 1/1/09)
Worked with a coalition of consumer groups around the state
for insurance reform
Slide 4
July 20, 2015
Accomplishments (continued)

Influenced pro-consumer legislation of January 2007 which:
Froze windstorm rates state-wide (expires 1/1/09)
 Repealed “use and file” statutes (expires 1/1/09)
 Strengthened the Florida Building Code and elimination of
exemptions
 Mandated CPIC claims resolution within 90 days of filing
 Provided for quarterly and bi-annual premium payment options
Created strong working relationships with the Office of Insurance
Regulation and key legislators in Tallahassee


Slide 5
July 20, 2015
Current Projects


Address increasing premiums for condominium
associations
 Completed comparative data analysis regarding
 Rates
 Actual damages
 Delivered analysis to the office of the state Consumer
Advocate on Insurance Issues and requested an
actuarial analysis
Beginning to collect and analyze data on commercialcommercial properties
Slide 6
July 20, 2015
2008 Challenges - Rates
Insurance Commissioner McCarty’s order to
roll-back Monroe County windstorm rates
expires at midnight on New Year’s Eve.
 CPIC has filed a preliminary rate analysis
suggesting that, once again, Monroe County
will be faced with an increase in our rates of
between 91% and 123%.

Slide 7
July 20, 2015
Notes on
CPIC Rate Analysis
The rate range varies based on whether
reinsurance is acquired primarily through the
Florida Catastrophe Fund or through private
reinsurance sources.
 It is unclear to what base rate CPIC will
apply these percentage increases.
 This is a preliminary analysis, not a rate
filing.

Slide 8
July 20, 2015
Possible 2009 Rate Changes
per CPIC Analysis
+3% to +31%
+21% to +79%
+10% to +88%
+7% to 31%
+17% to +55%
+54% to +97%
+12% to +105%
-7% to +75%
-9% to +28%
+91% to +123%
-9% to +95%
From CPIC Personal Lines Rate Analysis of December 2007
Slide 9
July 20, 2015
Household Impact of Indicated
CPIC Rate Changes in Monroe
Weighted Average Premium per Household
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
$7,229
$6,225
$3,242
At Current Rate
With 91%
Increase
With 123%
Increase
From CPIC Personal Lines Rate Analysis of December 2007
Slide 10
July 20, 2015
Economic Impact of Indicated
CPIC Rate Changes in Monroe

These increases would equate to a
considerable loss of disposable income for
Monroe property owners annually:
At 91%, we’d lose $77,720,000
 At 123%, we’d lose $102,542,000

From CPIC Personal Lines Rate Analysis of December 2007
Slide 11
July 20, 2015
Potential Average Premiums in
Comparable HRA Counties
$0
Brevard
Broward
Collier
Dade
Duval
Escambia
Franklin
Monroe
Pinellas
Sarasota
Volusia
$2,765
$8,000
$6,000
$4,000
$2,000
$3,663
$2,947
$5,394
$3,937
$5,537
$3,288
$1,791
$2,278
$2,249
$7,045
$3,328
$2,583
$3,162
$6,225
$3,662
$1,624
$1,439
$1,830
$3,056
$7,229
$4,685
Low-end
High-End
From CPIC Personal Lines Rate Analysis of December 2007
Slide 12
July 20, 2015
FIRM Analysis of
CPIC Rate Analysis


Again, Monroe County would pay the highest rate in the
state for windstorm insurance.
The same rationale for disapproving the last rate increase
stands today:




Slide 13
Monroe has had the toughest building code in the state for the
longest period of time.
Key West in particular has a history of sturdy construction and
buildings that have withstood storms for over a hundred years.
Unlike other HRA areas, our diminishing population and tough
development regulations limit the growth of exposure for CPIC.
Actual CPIC experience confirms that losses per claim in Monroe
County are less than in other high risk areas of the state.
July 20, 2015
Insurance Claims Per Policy in
Force in Selected HRA Counties
Property damage per insured property from the same storms is lower in
Monroe than elsewhere in Florida. Wilma and Katrina are prime examples.
County
Citizens
Policies in
Force (HRA)
Storm
Monroe
24,632
Katrina
Palm Beach
58,352
Collier
Citizens
Windstorm
Claims
Windstrength
Relativity
Claims
Paid per
Policy
$22,542,608
baseline
$915
Katrina
$120,286,077
similar
$2,061
9,388
Katrina
$31,582,635
similar
$3,364
St. Lucie
1,652
Katrina
$9,220,467
lower
$5,581
Monroe
24,632
Wilma
$22,927,392
baseline
$931
Dade
85,270
Wilma
$198,031,608
similar
$2,322
TO READ: In Katrina, wind strengths were lower in St. Lucie County than Monroe County, and Citizens windstorm claims paid were higher.
SOURCE: Citizens Property Insurance and the National Weather Service
Slide 14
July 20, 2015
FIRM Action Plan on
Monroe County Rates





Prepare an analysis of the CPIC rate analysis and share with
OIR, the Consumer Advocate and key legislators (DONE).
Continue to build our database of information regarding
rates, meteorological predictions and Monroe building
conventions.
Monitor all filings from CPIC.
Mobilize residents in letter-writing and petition-gathering
campaigns when the time is right.
Lobby the County and municipalities to again retain the
services of an actuary and an attorney to represent Monroe
in a challenge to the rate filing if necessary.
Slide 15
July 20, 2015
2008 Challenges (continued)


Permanently sustaining the repeal of “use and file”
Encouraging greater transparency from CPIC, the quasigovernmental agency, in:







Rate-setting
Underwriting
Billing
Building the Florida Catastrophe Fund, possibly through earmarking
a portion of the post-storm windfall sales tax revenues for the
purpose
Abolishing “PUP” companies
Creating a consistent source of funding for hardening our homes
Ensuring accurate assessment of building strengths and proper
allocation of mitigation credits.
Slide 16
July 20, 2015


Analyzed outstanding claims from 2004/2005 season
Encouraged by these actions from CPIC:










Tremendous expansion of adjusting staff
Implementation of mobile disaster response units
Electronic document handling
Redundancy in call service centers
Improved customer website
Outside adjuster training programs already in place
Insurance agent training programs to launch this quarter
Direct communication between agents and underwriters
Drafted legislation to train and license public adjusters
and umpires
Investigating the wind-driven rain exclusion
Slide 17
July 20, 2015
Windstorm Mitigation
Advisory Committee

Newly formed statewide committee to:



Analyze results of a mitigation credit survey prepared by
modeler ARA
Provide recommendations about building conventions,
construction and wind mitigation techniques, and the
appropriate allocation of mitigation credits
FIRM Board Member and Key West City Engineer
Annalise Mannix appointed to the committee
Slide 18
July 20, 2015
Changes in Eligibility
Requirements from CPIC


Mandated by the legislature in the 2007 special session
As of January 1, 2009, you may not be eligible for
windstorm insurance from CPIC if you:


Have a home with an insured value of over $1,000,000
Have a home with an insured value of over $750,000 and
DO NOT have shutters
• CPIC is clarifying whether this applies to Class A, B or C
shutters, impact-resistant windows and plywood

Slide 19
Build a home within 2,500 feet of the coastline that
does not meet FBC code-plus standards
July 20, 2015
FIRM Activity





Be prepared for CPIC rate filing for 2009
Stay abreast of proposed legislation in this session
Lobby for permanent repeal of “use and file”
Maintain a presence in Tallahassee during the
session to counter insurance industry lobbying
efforts
Build letter-writing campaigns in support of
legislation that will benefit consumers
Slide 20
July 20, 2015
Wait – there’s more!




Slide 21
Condominium and Commercial Rates
Federal Catastrophe Insurance
Mitigation Education
Continued Improvement in Citizens
July 20, 2015
What you can do for FIRM





Make sure all your friends are FIRM members.
Donate money.
Remind your representatives that voters elect
them, not insurance companies.
Volunteer – we need more bodies!
Come to our Happy Hour on April 11 from 4 to
8pm at the Southernmost Beach Café in Key
West.
Slide 22
July 20, 2015
What you can do for FIRM
(continued)

Stay informed.





Slide 23
Watch, read, listen to the media.
Visit our website regularly: www.FIRMkeys.org.
Read your e-mails.
Find out where the candidates stand on insurance
issues before you vote for them.
Vote in our upcoming FIRM Board elections.
July 20, 2015
FIRM Board Slate













Michele Beach, Owner of The UPS Store and Tropical Arts & Crafts Supplies, Key Largo
Heather Carruthers, Co-owner of Pearl’s Rainbow Resort, Key West
Nat Cassel, Assistant Monroe County Attorney, Ramrod Key
Cindy DeRocher, FIRM Co-founder and General Manager of the Gardens Hotel, Key West
Robbie Hopcraft, Mortgage Broker and Owner of Best Rate Lending Services, Key West
Teri Johnston, Co-owner of Affiliated Design & Construction and City Commissioner, Key West
Kim Mack, Financial Consultant, Key West
Annalise Mannix, P.E., City of Key West Environmental Programs Manager, Key West
Mel Montagne, Commercial A.E. and Branch Manager, Keys Insurance Services, Marathon
Donna Moody, FIRM Co-founder and Retired Landscaper, Key West
Colleen Repetto, Treasurer, Coldwell Banker Schmitt Charitable Foundation, Marathon
Al Sachs, Retired Aeronautical Engineer, Key West
Gary Sechen, Chief Financial Officer, Key West Bank, Key West
Slide 24
July 20, 2015
What YOU can do for You 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%.
Slide 25
July 20, 2015
What YOU can do – MITIGATION (continued)

Roof Discounts.

Slide 26
How your roof is connected to your walls can save
you money. Hurricane straps are a big help.
July 20, 2015
What YOU can do – MITIGATION (continued)

Roof Discounts.



Slide 27
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
What YOU can do – MITIGATION (continued)

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 28
PYRAMID HIP ROOF
A hip roof built on a square
base with eaves of the same
length.
July 20, 2015
Send Information to:
FIRM
PO Box 5882
Key West, Florida
33045-5882
Slide 29
July 20, 2015
E-Mail/Fax Information to:

[email protected]

Fax: 305-296-4867
Slide 30
July 20, 2015
Get Information at:
www.FIRMkeys.org
Slide 31
July 20, 2015
Closing Remarks
We have proven that we do have a voice and
can make an impact.
 Stay active, educated and involved.
 This fight is FAR from over.
 Thanks for taking the time to join FIRM this
evening.

Slide 32
July 20, 2015