On this Waypoint Real Talk Podcast, John Shishilla, owner at Honor Services talks about a new proposed Florida bill that affects all Florida homeowners.
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What are the Current Issues With Florida Insurance Claims?
Today, a large number of homeowners have roofing contractors on their doorstep after a storm looking to make an insurance claim.
The contractor typically wants to inspect your roof for storm damage, whether from hail or wind, and then take out a claim on your home insurance for any damage they find.
The pros of this are the roofing contractor gets to sell a new roof, and you, the homeowner, get a free roof as long as you pay your insurance deductible.
Moreover, some roofing contractors ask the homeowners to sign off on a document that allows the contractor to pursue the insurance company in court on the homeowners’ behalf. This is to make the insurance company payout for a roof even if they denied your initial claim.
While this may seem like an awesome deal, it may not be. Insurance companies are put in difficult positions and ultimately may raise home insurance rates to cover their costs.
In fact, Florida insurance rates have been increasing significantly over the past few years, more than in the rest of the country. Source.
Michelle Mosher from SouthShore Insurance in Tampa Bay actually emailed me this:
I hope you’re doing well. Recently, I’ve had a lot of clients approach me with questions about why Florida’s property insurance rates are increasing so dramatically. In case you’ve been wondering the same thing, I wanted to share some insights on the matter and how you can get involved.
Here’s an explanation of the rate increase:
There are frivolous lawsuits being filed by trial attorneys with fee multipliers equal to 2-3 times the hourly rate for an average attorney. They are able to earn six-figure fees on a $10K settlement–none of which is shared with the policyholder.
Thousands of claims are being reported with roof damage that appears to be general wear-and-tear or maintenance-related as opposed to damage with causes covered by peril insurance (including fire, lightning, windstorms, etc.). Costs are rising due to lawsuits being filed for damages caused by a hurricane that made landfall three years ago.
The implications of the above have many businesses and homeowners calling for reform. Some of the most sought-after changes include ending fee multipliers for lawyers who are receiving egregious paydays from run-of-the-mill lawsuits, adding additional, affordable options for roof coverage for consumers, and reducing the statute of limitations for filing claims–meaning damage should be reported immediately, not 3-5 years after it occurs.
Fortunately, there are actions we can take as citizens to try and combat these rate increases. Here are some simple ways you can make an impact:
Reach out to your legislators today and let them know how much your premium has increased this year!
Encourage their support of legislation that aims to achieve the much-needed reforms listed above.
Follow the Floridians for Lawsuit Reform Advocacy Group and sign the petition to make your voice heard.
Tell your family and friends about the cause–if they live in Florida, their premiums are also going up.
If our state does not act on the issues I’ve mentioned, your homeowner rates will continue to increase. Getting involved only takes a couple of minutes of your time–and the impacts are far-reaching for homeowners across Florida.
If you have any questions or concerns about your homeowner’s renewal rate, please don’t hesitate to contact us. We will do everything possible to help you get your rate down.Michelle Mosher, Southshore Insurance Professionals
The Proposed Solution
The new proposed bill attempts to solve this. Instead of insurance companies having to payout for the entirety of the new roof, insurance will only have to cover a pro-rated cost of the roof based on life expectancy.
Therefore, if a storm damages your 10-year-old roof, insurance may only payout for half the new roof cost since you already received 10 years of the roof life.
Ultimately, this will make homeowners more responsible for covering the roof replacement and maintenance costs rather than waiting for a storm to damage their roof so they can file a roof claim.
While this sounds like insurance companies are winning, this is proposed in hopes that insurance rates in Florida will slowly fall as unnecessary roof claims dwindle.
Home Insurance in Florida has always been a tricky subject due to our hurricane season. Inspections like the four-point, wind mitigation, and roof certification all contribute to Florida’s insurance complexity.
Homeowners will have to budget more on their own for a new roof, keep up with regular maintenance, and be more mindful next time a roofing contractor promises a free roof paid out by their insurance company.
For more information, listen to the podcast above. Questions? Comment below.