Hurricane Preparedness Summit An Update Prepared by the Grassroots Organization FIRM Fair Insurance...

Hurricane Preparedness SummitAn Update Prepared by the Grassroots Organization FIRMFair Insurance Rates in Monroe June 2, 2008

April 10, 2023 Slide 2

Outline

Background 2008 Legislative Session Future Goals Practicalities

Insurance PreparednessCPIC Claims Handling ChangesMitigation

Questions & Answers


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 Currently a 501(c)(6) organization

Not-for-profit, but donations are not tax-deductible Allows us to advocate and educate

Successfully worked to lower windstorm rates for Monroe residents and for insurance reform statewide

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.”


2008 Insurance Legislation

CPIC rate freeze extended until January 1, 2010 New 2010 rates must be actuarially sound

“Use and file” repealed until January 1, 2010 Homestead distinction eliminated CPIC may offer wind-only coverage where not

available in the private market CPIC Coverage exemption now applied to two-

million dollar homes


2008 Insurance Legislation(continued) Greater transparency required

CPIC rates must be vetted through Florida Public Hurricane Model

Private firms must share “trade secrets” with OIR OIR must have access to all factors used in rate-

setting Consumers must have access to rate-filings via

website Consumers who challenge claims must have access

to all their files


2008 Insurance Legislation -- Additional Provisions Citizens Property Insurance Corporation Consumers cannot be “taken out” of CPIC if the

premium of the new provider would exceed that of CPIC by 15% or more

Coverage of manufactured and mobile homes built before 1994 will be limited to cash value (not replacement value)

Consumers must have 180 days’ written notice of cancellation

CPIC may not file an administrative review or judicial challenge to an OIR finding

A task force will be convened to return CPIC to its former status as an insurer of last resort


2008 Insurance Legislation -- Additional Provisions

Citizens Property Insurance Corporation (continued)

As of January 1, 2009, any home with an insured value of $750,000 or more must have shutters to be insured by CPIC.

As of January 1, 2011, any buyer of a residential property (regardless of insured value) located in the windborne debris region must receive a written disclosure of the structure’s “windstorm mitigation rating” from the seller.

A prior stipulation that homes constructed after January 1, 2009, within 2,500 feet of the shoreline must be built to “code-plus” standards in order to be insured by CPIC has been eliminated.


2008 Insurance Legislation -- Additional Provisions

Citizens Property Insurance Corporation (continued)

Assessments to cover existing CPIC deficits will now kick in when CPIC deficits exceed 6% of their projected direct written premium for that year.

Emergency assessments may be required when/if regular assessments are insufficient to recover the existing deficit, and may be levied for as many years as necessary to eliminate the deficit. Such emergency assessments may not exceed 10% of the amount required to eliminate the deficit or 10% of the statewide premium, whichever is greater.

If a new deficit is incurred after 2008, all CPIC policyholders may be levied a surcharge of up to 15% for a period of 12 months to cover the deficit.

Should CPIC actually collect surcharges in excess of any deficits, the excess will remain with CPIC to offset any future deficits (and the potential for any future surcharges or assessments).


2008 Insurance Legislation -- Additional Provisions General Property Insurance Providers Mitigation

Commission will bring consistency to application of mitigation credits pursuant to the uniform home grading scale by February 1, 2011

As of January 1, 2010, anyone purchasing a home over $500,000 in insured value must receive written disclosure from seller of the structure’s “windstorm mitigation rating.”

Insurers must pay undisputed claims amounts within 90 days of receipt of the claim


2008 Insurance Legislation -- Additional Provisions General Property Insurance Providers (continued)

Capital Build-Up Incentive Program allows start-up companies to build the capital

required to satisfy regulatory standards of solvency by taking funds from the state in exchange for surplus notes from the insurer

open to insurers that commit to increasing their writings of property insurance, including wind


Work with FIU to determine if Monroe County factors are accurately addressed in the FPHM Factors include:

• Construction history (building code, height restrictions)• Geography (linear island string, undeveloped mainland)• Meteorological history• Topography (wind versus flood)• Construction costs (labor and materials)

Will address:• Residential dwellings• Condominiums• Commercial properties

FIRM Next Steps


Monitor all rate filings Participate in ongoing and new task forces Work for permanent repeal of “use and file” Lobby for dedication of windfall sales tax for

hurricane-related uses Work towards a federal catastrophic

mechanism, similar to flood insurance

FIRM Next Steps (continued)


Practicalities –INSURANCE PREPAREDNESS Take detailed, dated photographs of your home

and belongings prior to hurricane seasonProvide a set to your insurance agentSecure a set in a waterproof container

Gather all paperwork (deeds, drawings, plans, receipt) related to your dwelling and secure in a waterproof container

Review your policy with your insurance agent to make sure coverage is appropriate


Practicalities – CPIC CLAIMS HANDLING IMPROVEMENTS Significantly increased claims handling staff Moved to electronic claims handling Educated outside adjusters in advance of

hurricane season Created mobile units to respond quickly Empowered field adjusters to distribute ALE

checks on site Built redundancy into call handling centers


Practicalities-

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%.


Practicalities – MITIGATION (continued)

Roof Discounts. How your roof is connected to your walls can save

you money. Hurricane straps are a big help.



Roof Discounts. 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.



Construction. A hip roof may save you up to 23%.

SIMPLE HIP ROOFA gable roof with the ends

brought together at the same pitch as the rest of the roof.

PYRAMID HIP ROOFA hip roof built on a square

base with eaves of the same length.


Thursday, June 12, 2008 4:00 to 7:00 p.m. Harvey Government Center in Key West

Forum will be taped and broadcast on the government channel

Attendees will include: Insurance Commissioner Kevin McCarty Representatives from CPIC FIRM You!

CPIC Policyholder Forum


Get Information at:

www.FIRMkeys.org

Hurricane Preparedness Summit An Update Prepared by the Grassroots Organization FIRM Fair Insurance...

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