As if there isn’t enough going on with Florida home insurance these days, we are now upon hurricane season. NOAA forecasters have estimated there to be a 65% chance that this year will have “above average” activity, which would make it the seventh consecutive year of unwanted overachievements.
For the 2022 hurricane season, they have forecasted a range of 14 to 21 named storms (winds of 39 mph or higher), of which 6 to 10 could become full blown hurricanes (winds of 74 mph or higher). This includes 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher).
So what can you do? How can you best prepare and if in the process of a real estate transaction, avoid closing delays or lost deals? We can’t stress enough the importance of starting the insurance process early. This is helpful even outside of hurricane season because underwriting guidelines have tightened up and things can take time like inspections, appraisals, remedying any issues, etc. But the idea of starting early is more important than ever when it’s stormy season. If there is a named storm headed our way or posing as a threat to our area, insurance carriers will begin binding suspensions. This means that any policies in the quoting status cannot be bound… regardless of closing requirements.
Here are a few other quick tips to help you prepare:
- Trim trees and pick up any lawn debris
- Double check the “Other Structures” coverage on your homeowners policy
- Be sure you understand your hurricane deductible, it’s oftentimes different
- Purchase household items, food, and water for an emergency backup kit
- Be prepared to document and mitigate any damage
We are hopeful for an uneventful storm season so we can focus on the positive change we’re seeing with property insurance reform but if you need anything or have questions, we’re here… in all kinds of weather.
The property insurance reform bill that was under review in the Senate’s special session this week has passed! It received our Governor’s signature and is yet another step in the right direction to making home insurance available and affordable again.
More details on what this bill entails can be found here
but the following points are what we consider to be the most important:
- Reinsurance assistance for insurance carriers that results in reduced premiums for consumers
- Policies cannot be refused or non-renewed solely because the home’s roof is less than 15 years old, contingent on an inspection confirming that there are at least 5 years of life left on the roof
- Limitations on attorney fees and fee multipliers
- New roof deductible options
- More Office of Insurance Regulation guidelines to help prevent Florida-based carriers from financial instability or liquidation
- Roofs with less than 25% damage can be repaired, rather than requiring full replacement
- Steps to curb fraudulent roof claims and roofing contractor solicitation
- Grants and tax exemptions for wind mitigation efforts
This bill received its final stamp of approval from Governor DeSantis, who stated that this package is “the most significant reforms to Florida’s homeowners insurance market in a generation.”
We remain hopeful and excited for positive change. We are in this together and ultimately, want to keep homeownership as great of an experience as possible for all Floridians.
The national average cost of a gallon of unleaded fuel is now at $4.56 but it is still expected that Memorial Day weekend will be one of the most heavily traveled times of the year. AAA predicts that over 39 million people will hit the road and go 50 miles or more from home to enjoy the three day weekend. This prediction of travelers is up over 8% from 2021. So what does this mean if you’re one of those brave road trippers? Here are some pro tips:
- Have your vehicle serviced ahead of time – oil and fluid change/top off, check tire pressure or rotate them, and windshield wipers
- The Red Cross recommends always having an emergency kit with supplies such as water, a flashlight, cell phone charger, jumper cables, first aid kit and spare tire
- Be sure your proof of insurance card and registration are in the vehicle
- Pack extra bottled water and stay gassed up in the event of traffic delays
- Use a navigation app such as Waze for traffic detours, road closures, etc.
- It’s also a good idea to pack your spare key in a purse or bag that won’t necessarily be in the vehicle the whole trip. It’ll do you more good in your hotel room than all the way back home if you happen to misplace or lose your keys while you’re away.
If you plan to rent a vehicle at any point on your trip, we always recommend purchasing the insurance coverage that they offer. It’s very common that people assume they have everything they need on their own auto policy back home but it doesn’t always transfer to a temporarily rented vehicle. Typically, the coverage for the vehicle itself would (as long as you have comprehensive and collision on your policy), but liability is one of the most important parts as well as injury protection for you and your passengers. It’s wise to add their protection when possible, especially since it’s usually inexpensive.
The best move you can make is to be prepared… with your packing list but also your mindset. With 39 million people on the road, you’re bound to have delays or detours but try not to stress. This kicks off a summer of sunshine and should be a fun time! After all, it wasn’t that long ago that we didn’t have the ability to vacation during the pandemic so hang in there and safe travels!
When the House session ended earlier this month without any progression for Senate Bill 1728, we were disappointed and discouraged. And we assume, if you’ve been following along, you were too. We were unsure if and when a special session would be called by the governor, or if we’d be forced to exercise all the patience we have left until next year.
But gratefully, we are excited to share that some good news was just released and it may be just the relief we’ve been asking for!
In a meeting of the Florida Cabinet earlier this week, it was revealed that the Office of Insurance Regulation will now allow property insurers to offer roof deductible endorsements as well as a schedule on what will be paid on roof replacements.
Similar roof deductible provisions were included in Senate Bill 1728, which passed the state Senate in the regular session but stalled in the House. However, Florida state statutes allow the OIR agency the authority to make regulatory change without the need of legislation. Thankfully, our home state’s insurance regulators are taking steps on their own to help cut the cost of roof claims.
One of the main improvements in this is that policyholders will have the option to choose their roof deductible up front and carriers will no longer be required to offer full replacement cost only. Currently, Florida appears to be the only U.S. state that requires full roof replacement when only 25% of the roof is damaged.
This change comes at a very opportunistic time for all of us as June 1 is when many carriers must renew their reinsurance, and prices are expected to increase dramatically.
This is potentially really good news for the real estate, mortgage lending and insurance industries. We don’t know for sure yet what change will come from this but it’s a step in the right direction of making home insurance available and affordable. We are hopeful.
Headaches are known to be caused by things like dehydration, malnutrition, stress or lack of sleep. But if we had to guess, home owners and those affiliated with the real estate industry have experienced a headache lately that can be blamed fully on the current state of home insurance. As much as we don’t like or agree with the challenges home owners are facing, we can provide a little insight as to why things are the way they are.
To put a quite complicated issue simply, it really boils down to three things:
Fraud – Roofing guidelines have gotten more and more strict and it’s in large part due to an unfortunate amount of claims filed unnecessarily for roof replacements. The involvement of roofers themselves, public adjusters and the misuse of the Assignment of Benefits tool have all contributed to an increase in claims that insurance companies have struggled to sustain through. Profitability and the ability to pay legitimate claims are down, making insurance companies unable to be there for consumers when they need them the most.
Litigation – Property claim payouts have been cited to be up to 4.5 times more when an attorney is involved. Over the past 9 years, approximately 71% of the billions of dollars paid out on property claims when to attorney fees. This one speaks for itself.
Reinsurance – Approximately 40-45 cents of every dollar of a homeowners insurance premium goes toward the cost of reinsurance. This is the insurance that insurance companies buy to protect themselves from overwhelming losses in larger claims and catastrophe situations. When insurer’s expenses are up this high, one of the only ways to compensate is to increase premiums.
It’s safe to say that everyone involved in the insurance, real estate and associated industries agrees that something has got to change. There are people unable to accomplish homeownership or being priced out of opportunities because of these issues. At this time, the reform bill that the Senate presented to the House has been postponed until either next session or a special session, should the Governor call for it. Therefore, there is little to no control over the situation other than hoping for legislative action to be taken sooner than later and spreading awareness to minimize fraudulent and litigious activity.
Hang in there, guys. You make think home insurance is quite a necessary evil at this point. And while the necessary part is true, it isn’t all evil… we’re actually here to help and advocate for home owners. We can get through this together.