TAMPA BAY, Fla. — We are learning more about what Florida property insurance companies are doing to get around new state legislation regarding roofs in order to stay in business for homeowners.
Independent insurance agents say it’s not as if insurance companies are being sneaky to get around insuring older roofs, but instead, they just cannot take on any more financial risk of being sued.
New laws out of May’s special session prohibited companies from denying a homeowner insurance due to the age of their roof. If it’s more than 15 years old, they have to let them get an inspection and waiver proving it has at least five more years on it.
However, several insurance agents tell ABC Action News that they’re now seeing new requirements come down from multiple companies with things like limits on the age of an entire home.
This week, Southern Oak sent a notice to agents stating that as of July 30, they will only cover homes at a minimum of $250,000, and all homes must have been built in 2022.
They are also temporarily closing new business in 10 counties due to increased reinsurance costs:
- Broward
- Escambia
- Gulf
- Indian River
- Lee
- Martin
- Monroe
- Palm Beach
- Santa Rosa
- Walton
Southern Oak’s explanation in the notice states:
“The Florida property insurance market is facing many challenges that have led to increased rates, less capacity, and some companies exiting the market. Thanks to a flourish of positive growth so far this year, we are outpacing our projected reinsurance growth and feel that temporarily limiting our capacity will maintain the level of financial responsibility and exposure management that our policyholders and agency partners know and trust.”
Florida Strategic Insurance Partner and Agent Mike Puffer explained, “They just want to minimize the risk as much as possible. And they're trying to also do that by mitigating the risk of all of their current policyholders. So that's why we're getting a ton of nonrenewal, and we're getting a lot of memos that people have to make some changes if they want to keep coverage.”
We’re told that at least five other companies now have age limits on homes, including:
- Olympus
- American Traditions
- American Integrity
- Universal Property & Casualty
- Frontline
“American Integrity started off by a couple of territories, saying they weren't gonna write any home that was older than one year old, so had to be a brand new home. And now I believe they've opened that up to the entire state of Florida,” Puffer explained. "So the insurance companies have just gone into an incredibly protective mode where they want to be able to stay in business and handle all of the policyholders that they're currently writing.”
Aside from rate increases, that's good news for homeowners because several companies are no longer writing.
In addition to the nine companies that have already gone into receivership and several that have left the state entirely, Bankers Insurance is the latest company to announce it's pulling out of homeowner’s insurance in Florida in order to keep writing commercial and flood insurance.
In a statement Monday, Bankers said:
“Unprecedented reinsurance costs over the last several years are forcing many carriers, including Bankers, to seek viable options to continue offering a mix of product lines in a distressed marketplace. Recent legislative measures, unfortunately, failed to adequately address the immediate financial challenges faced by property and casualty insurers, including combating fraud and litigation which exponentially outpaces every other state. We have, therefore, made the difficult decision to inform the Office of Insurance Regulation that Bankers is exiting its Homeowners (HO3) and Dwelling Fire (DP3) lines in Florida.”
Michelle Mosher, agent and owner of Southshore Insurance Professionals, said she’s seeing other new requirements as well.
“Now I have a company who will take your roof if it's over 15 years old, but it has to have a secondary water resistance layer as part of the wind mitigation, and if it doesn't, it's not acceptable. So if you didn't do that 15 years ago, when you got your roof, you can't go to them as an option,” Mosher explained.
Some insurance companies like American Integrity do still offer coverage for homes up to 30 years or even older with a qualified inspection. There are also certain programs that tailor coverage to the age of the home and its characteristics. Agents who write for multiple companies can help homeowners find the best insurance for their homes.
As we wait for possible downgrades from Florida’s rating agency Demotech, Puffer’s advice is that homeowners with older roofs start budgeting to get a new one soon in order to ensure they can continue to get coverage.
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