Transcript Windstorm Insurance Rates Create Crisis in Monroe County

Welcome to the Key West
Townhall Meeting
Prepared by the Grassroots
Organization F.I.R.M.
Fair Insurance Rates in Monroe
May 24, 2007
Agenda
Welcome- Teri Johnston
 Representative Ron Saunders
 Condo Rates-Teri Johnston/Heather
Carruthers
 Questions/Answers
 Citizens Task Force-Heather Carruthers
 Mitigation – Teri Johnston
 Close- Teri Johnston

July 21, 2015
2
2007 Good News
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Citizens current rate frozen until 2009
Increased uniformity of statewide building code
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Elimination of panhandle exemption
Establishment of windstorm construction task force
Establishment of “code plus” building criteria
More consistent application of mitigation credits
Mandatory 90-day claims resolution
Expansion of definition of “High Risk Accounts” to
include interior areas
Possible elimination of Citizens’ distinction among
“Personal Lines Accounts,” “Commercial Residential
Accounts,” and “High Risk Accounts”
July 21, 2015
3
FIRM Condo Strategy
Duplicate our residential strategy
 Financial Impact
 Comparative Data
 Mitigating Factors
 Meteorology
 Profit and Loss
July 21, 2015
4
Effect of Skyrocketing Windstorm
Premiums on Monroe County

Escalating insurance premiums are
devastating our economy.
The last Citizens increase (from
$16.92/thousand to $20.91/thousand)
represents $35 million dollars of lost
disposable income of Keys residents.
 The proposed 44% increase (which has
been eliminated) would have represented
$79 million dollars out of our pockets.

July 21, 2015
5
Financial Impact

To date FIRM has not been able to
organize or collect data from the over
300+ Condo Associations in Monroe
County. Firm needs a representative
sampling of 30-50 Condominium
Association Insurance data for analysis.

We need a copy of your Association
Declaration pages “from the past 3
years.
July 21, 2015
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Comparative Data
We need to know WHO is insuring your
Association so that we can investigate
rates statewide. Are Monroe County
Condominiums being treated differently
from the rest of the state? We have the
following information on Citizens
Insurance but what about your
“Building” insurance.
July 21, 2015
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Estimated 2006 Citizens’ Condo
Windstorm Premiums on $350,000 Coverage
$5,201
$2,793 to $5,201
$5,201
$5,201
$5,093
$2,793 to $5,201
$5,093
$5,201
5,201
$10,831 to $13,125
$5,093
From CPIC filing for combined building & contents for a 5-unit building, 2 or more stories high effective August 1, 2006
July 21, 2015
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Mitigating Factors
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Monroe County is especially well equipped to deal
with hurricanes.
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Monroe County has the strictest building codes in the
state of Florida, requiring buildings to withstand 150 MPH
gusts.
Key West has the largest wood-frame historic district in the
nation, with thousands of buildings that have withstood
storms for over a century and a history of construction to
endure the sometimes harsh environment.
Many historic buildings have been significantly reinforced
over the past 30 years.
The low population density of the Keys translates into
fewer housing units and lower potential storm exposure.
.
July 21, 2015
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Meteorology
City

Many areas outside
of Monroe County
have experienced
tropical storms as
frequently as or
more frequently than
Monroe County.
SOURCE: www.hurricanecity.com
July 21, 2015
years between tropical storms
Hollywood
2.60
Deerfield Beach
2.60
Boca Raton
2.60
Ft. Pierce
2.65
Florida City
2.65
Key West
2.70
Miami
2.70
Ft. Lauderdale
2.70
Stuart
2.75
Lake Worth
2.75
Spring Hill
2.75
Jupiter
2.87
Pensacola
2.93
Jacksonville
3.00
Marathon
3.14
10
Insurance Claims Per Policy in
Selected Counties – Wilma & Katrina
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
Citizens
Windstorm
Claims
Windstrength
Relativity
Claims
Paid per
Policy
Monroe
24,632
Katrina
$22,542,608
baseline
$915
Palm
Beach
58,352
Katrina
$120,286,077
similar
$2,061
Collier
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
July 21, 2015
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Profit and Loss
FIRM needs your condo
historical data so that we
can compare premiums
collected vs. claims paid.
July 21, 2015
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F.I.R.M’s Approach
Building strength analysis
 Analyze premiums paid vs. claims paid
compared to other areas of the state.
 Need feedback from YOU!
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July 21, 2015
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Condo/Commercial Rates:
What We Know Today

Only 5 companies writing the majority of condo
association policies vs. 30 companies writing condo
unit owner (residential) policies.
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Citizens represents 57% of the market.
Very little competition.
A national standard is used instead of a state standard
to distinguish what is inside versus outside of the
walls.
Potential for litigation as unit owners and association
may differ over where responsibility for damage lies.
Much of the condo market consists of mega-buildings
(Century Village, high-rises along Key Biscayne, etc.)
which represent very high PMLs
July 21, 2015
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Condo Data Collection
1.
2.
Need to see who is insuring Condo
Associations- Are the coverages and
rates varying between companies who
are insuring the “Building”
Why are there only a small number of
companies willing to insure the
“Association”. Why do they appear to
be a higher risk?
July 21, 2015
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F.I.R.M.’s Focus Forward
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Permanent elimination of “Use and
File”
Condominium Rates
Federal Catastrophe Insurance
Mitigation Education
Continued Improvement in Citizens
July 21, 2015
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Stay Active in Tallahassee
 Since
forming, FIRM members
have traveled to Tallahassee on
7 occasions to lobby for fair
rates for Monroe County and to
monitor legislative actions that
could potentially impact our
county.
July 21, 2015
17
Task Force on Citizens Property
Insurance Claims Handling & Resolution

Members:
Insurance Advocate General Bob Milligan
 Representative Julio Robaino
 Senator Mike Fasano
 Mike Twomey, Attorney
 Mike Lancashire, The Main Street America
Group
 Tim Loftin, Citizens Property Insurance
 Heather Carruthers, FIRM
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July 21, 2015
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Task Force on Citizens Property
Insurance Claims Handling & Resolution

Mission:
Resolve outstanding Citizens Property
Insurance Windstorm Claims from the 2004
and 2005 storm seasons (due July 1, 2007)
 Improve customer service on claims
handling side (due July 1, 2008)
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July 21, 2015
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Task Force on Citizens Property
Insurance Claims Handling & Resolution
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Findings from first meeting
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Legislative intent behind creation of Citizens was for it to be
non-competitive
Citizens was woefully unprepared for the 2004/2005 storm
seasons
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Over half of call center activities outsourced to firm on West
Coast (suffered Wilma damage)
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2 staff claims adjusters in 2004
8 staff claims adjusters in 2005
Received up to 40,000 calls per day after Wilma
Outsourced nearly all adjusting, much to out-of-state adjusting
firms already taxed due to Katrina
Used outmoded paper filing and tracking system for all claims
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July 21, 2015
Over 30,000 claims filed in Wilma
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Task Force on Citizens Property
Insurance Claims Handling & Resolution
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Steps CPIC has taken to correct problems
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Many new hires
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Currenty 61 adjusters on staff
Goal is to have 75 staff adjusters by end of 2007
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Staff adjusters will manage outsourced adjusters if needed
Call switching moved to satellite
Expanded call center in Jacksonville
Mobile units created to provide on-site adjusting
and processing post-catastrophe
Claims tracking gone paperless
July 21, 2015
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Task Force on Citizens Property
Insurance Claims Handling & Resolution
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Problems identified to date
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About 5% of claims from 2004/2005 unresolved
Citizens has 8,500 agents
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Public adjuster conflicts
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Most insurers have a few hundred in Florida
Need to improve agent/Citizens/consumer communications
Incentive to extend claims conflicts
Lack of certification for adjusters
Lack of education on local building codes and
practices
July 21, 2015
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Task Force on Citizens Property
Insurance Claims Handling & Resolution
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Next meetings
Monday, June 4, 2007 in Tallahassee
 Wednesday, June 13, in Pensacola
 Tuesday, June 19 in Ft. Lauderdale
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Nova University (Rose and Alfred Miniaci Performing Arts
Center, 3100 Ray Ferrero Jr. Blvd., Ft. Lauderdale, Fl 33314)
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Public Input WELCOME
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July 21, 2015
2:00 to 4:00 p.m.
6:00 to 8:00 p.m.
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What YOU can do - 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%.
July 21, 2015
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What YOU can do

– MITIGATION
(continued)
Roof Discounts. How your roof is covered
and how it is connected to your walls can save
you money. Hurricane straps are a big help.
July 21, 2015
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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.
July 21, 2015
PYRAMID HIP ROOF
A hip roof built on a square
base with eaves of the same
length.
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Mitigation Inspections
Any licensed contractor can complete
your inspection except for shutters
 Shutters must be inspected by a licensed
engineer, registered Architect or Building
Code inspector.

July 21, 2015
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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 to Representative Saunders and
all of you for taking the time to join FIRM
this evening.

July 21, 2015
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Send Information to:
FIRM
PO Box 5882
Key West, Florida
33045-5882
July 21, 2015
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E-Mail/Fax Information to:
[email protected]
Fax:
July 21, 2015
305-296-4867
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