It seems like every April 1st, the National Flood Insurance Program informs us that it is raising the premium rates for flood insurance. (Feel free to insert any April Fools jokes here.)
As of April 1, 2018, the average flood insurance premium rose 8 percent, with some property owners seeing increases of up to 25 percent. Despite what you might initially think, these increases are not the result of Hurricane Irma, but are part of an ongoing effort by Congress to get the National Flood Insurance Program out of debt. As of last count, the NFIP was approximately $25 Billion in debt.
The largest premium increases will be levied upon high risk properties. This high risk designation usually applies to buildings that were constructed prior to 1970 when the first flood insurance rate maps were produced, or to newer properties that are either non-primary residential properties, business properties, or properties that sustained substantial damage in the past. The properties deemed “low risk” will most likely see the smallest premium increases – perhaps less than 1 percent.
As a result of these higher premiums, there is a growing number of private insurance companies that are now offering flood insurance policies. Since these policies are not related to the National Flood Insurance Program, these private insurance companies can provide different coverages and higher policy limits than the standard flood policies. Although these private company flood policies may be a good choice for many consumers, you need to be wary as to exactly what you are purchasing, as the terms, conditions, and coverages of such policies vary wildly.
As they say, an ounce of prevention is better than a pound of cure. As high as flood insurance premiums may seem, the protection such policies provide after a catastrophic flood event far outweighs the pain of the monthly premium. If you have any questions regarding what coverages you have under your flood insurance policy, please feel free to contact our office for a free review of your policy.
Roof damage is the most common type of hurricane insurance claim we see after a hurricane, wind storm or hail event. Wind from hurricanes and tropical storms can cause substantial roof damage – whether just a few loose shingles or the total destruction of the entire roof structure. Even worse, any opening in your roof can cause water to enter your home and devastate your belongings. Hail can also cause severe damage and greatly reduce the functional life of your roof.
If You Have Questions Regarding Your Storm Damage Claim – Call (800) 451-6786 for Immediate Help.
After a roof damage loss, it is crucial to get your roof repaired or replaced as soon as possible. The longer you wait, the more time there is for additional damage to be caused by water loss. On the other hand, if full repairs are not completed and only a quick patch job is performed, you may be asking for an even greater problem down the road.
The question whether to repair or replace a damaged roof is hotly debated by insurance companies and their policy holders. During this epic struggle, you will most likely hear terms and phrases such as the “25% Rule”, the brittle shingle test, asphalt granular shingle loss and shingle bruising. In order to help better understand your insurance claim, we’ve provided a quick summary of these terms below.
The 25% Roof Replacement Rule of the Florida Building Code
The most commonly referenced roof damage term is the 25% Rule. The 25% Rule arises out of Section 708.1.1 of the Florida Building Code. The pertinent portion of this Code Section states as follows:
Not more than 25 percent of the total roof area or roof section of any existing building or structure shall be repaired, replaced or recovered in any 12 month period unless the entire roofing system or roof section conforms to requirements of this code.
There are a couple of important points to keep in mind with this Code Section. First, if a more than 25% of your roof is damaged – either from a fallen tree, high winds, or otherwise – then the entire roof must be replaced. If less than 25% of any portion of your roof is damaged, then (at least pursuant to this Code Section) the roof can just be repaired or patched. Secondly, the 25% can be measured by any given section of the roof. If more than 25% of any given section of the roof is damaged, then that section must be replaced and not merely repaired. Thirdly, there is a 12 month time frame over which this 25% is calculated. For example, if the initial damage does not reach the 25% threshold for replacement, but then over the next 12 months, additional repairs are required that cause the damage to go beyond the 25% threshold, then the entire roof section must then be replaced.
The Brittle Shingle Test
The brittle shingle test is a super scientific testing method whereby an inquisitive person picks up a shingle, tries to fold or bend the shingle up to a 90 degree angle, and then checks to see if the shingle breaks or bends. If the shingle breaks, then the shingle is brittle and the roof probably needs to be replaced. If, on the other hand, the shingle is still pliable and bends, then the roof is not a candidate for replacement (or so the insurance representative would say). This testing method is clearly subject to many variables (temperature of shingle being tested, etc.), but is often used by insurance companies as “proof” that the roof shingles are still functional.
Shingle Granular Loss
Asphalt granular shingle loss is generally calculated to occur at about a 3% rate per year. Unfortunately, damage from wind or bruising by hail can accelerate this loss by anywhere from 15% to 40%. Even if the damage doesn’t totally destroy the shingle or make an opening all the way to the matting, the artificially accelerated “aging” of your roof may be a covered loss under your insurance policy. The theory is that prior to the storm you had a roof with (hypothetically) 15 years of remaining life, but now after the storm damage, you left with a roof with only 5 years of useful life left.
Shingle bruising is usually caused by hail damage. When hail strikes an asphalt shingle, it can cause a localized loss of granules, usually circular in shape, to the shingle and a fracture in the mat beneath the shingle. The damage to the mat is usually referred to as a bruise and can be indicative of damage to the functional ability of the roof. Bruising and hail damage to a roof can cause a diminution of the water shedding ability of the shingle and a reduction in the functional life of the roof. Bruised shingles need to be replaced as such damaged shingles are no longer able to keep water and other elements from entering the structure.
Get Experienced Help for your Hurricane Insurance Claim
Please know that many of these determinations are very subjective and, unless you have a working knowledge of building construction and a mastery of the coverages available under your insurance policy, you may not be best equipped to handle your property damage claim by yourself, and may want to discuss your claim with an experienced property insurance claim attorney. Should you have any questions whatsoever, please contact our office and we will help guide you through whatever issues you may have with your insurance damage claim.
Policyholders are often shocked to learn that the loss settlement check they receive from the insurance company is payable not only to the policyholder, but to their mortgage company as well. Homeowners insurance policies are broken down into several types of coverage – whether for the building, personal property, liability, alternative living expense, or other losses. For certain types of coverage, the insurance policy will list the mortgage company as an “additional payee” on the policy – which means that the mortgage company’s name must be listed on any loss settlement check.
If you have any questions regarding your insurance claim, call (800) 451-6786 to speak with an insurance claim lawyer regarding your rights.
The reason the mortgage company is listed as an “additional payee” on the insurance policy is that the mortgage company has a vested interest in insurance coverage payments issued for any loss to the insured property. The mortgage company presumably loaned money to the policyholder and, in order to provide a guarantee of repayment, the policyholder agreed to grant the bank a mortgage on the property as collateral for the loan.
Should the subject property be damaged or destroyed, the unrepaired property would then be worth less than before the loss and therefore, the mortgage company would not have the same amount of security for the loan as prior to the loss. In order to protect the mortgage company’s security for the loan, the mortgage company’s name will appear on all insurance loss payments related to the property given as collateral for the loan. Because the property protects the mortgage company in case of non-payment of the loan by the policyholder, the mortgage holder has a strong interest in making sure the property is either repaired or the outstanding loan is paid down to a point at which the loan is again fully secured by the value of the property.
The inclusion of the mortgage company’s name on the insurance check usually just affects coverage relating to the actual building on the property, since the home is usually given as collateral for the mortgage loan. On the other hand, claims for damage to personal property, liability, or loss of use do not relate to property subject to a mortgage and therefore settlement checks on these losses would not have to include mortgage company’s name as an additional payee.
As Tropical Storm Erika was quickly approaching landfall a few weeks ago, Floridians were correctly focused on preparing for the high winds and water that could have caused an unknown amount of damage. As important as pre-storm preparation is, the steps you take immediately after the storm are also crucial with regard to your ability to adequately present a claim with your insurance company for the damage to your property.
Your first priority after the storm needs to be the safety of your family. After the safety of your family is assured, you need to thoroughly document the damage to your property. With the advent of cell phone cameras and other video devices, it is easier than ever to memorialize the damage caused by the storm and to easily provide same to your insurance carrier. Hopefully, you also have pictures and other documentation from before the storm so that you can demonstrate to the insurance company the nature of your property and the condition of same prior to the damage.
As soon as communications allow, you should also immediately place your insurance company on notice of your loss. Many insurance policies are now written to specifically mandate “immediate” notice of a loss, and insurance companies will often spend lots of money defending against the payment of your claim based upon an alleged “late notice” defense. After notification of your claim, the insurance company will send an adjuster to your property to inspect the damage. It is crucially important that you point out any and all damage to your property so that the damage can be documented.
Remember, even though the adjuster may be friendly and professional, he or she is not an advocate for the full payment of your loss. The adjuster is employed solely by the insurance company and, whether consciously or unconsciously, his goal will be to provide the least amount of coverage for your damage. If you are not satisfied with the treatment, coverage or payment provided to you by your insurance company, it is advisable to contact an attorney or other professional who has experience with handling property insurance claims. Most of these professionals work on a contingency fee basis and offer a free initial consultation, so there are no out of pocket costs to obtain help with your storm damage insurance claim.
The University of Florida Gators were scheduled to play football against the University of Idaho Vandals on August 30, 2014 in what was to be the Gators season home opener in Gainesville, Florida. The football game was initially scheduled to begin at 7:00 p.m., but due to heavy rains and lightning, the start of the game was repeatedly delayed and ultimately began around 10:00 p.m. After the first play of the game – Idaho kicking off to the Gators – additional lightning appeared and forced the eventual cancellation of the game. Although the two teams could have potentially rescheduled this game for a bye-week later in the season, officials from both schools ultimately decided against it.
So – all of that is nice, but what does it have to do with insurance you say? Well, due to the financial acumen of UF Athletic Director Jeremy Foley, the Florida Gators have always maintained an insurance policy to cover any loss in ticket revenue should a game be cancelled. Prior to each home game, the University provides its insurer, Lloyd’s of London, with an estimate of both prospective ticket sales and any potential losses. If a game is cancelled or if the University otherwise incurs a total loss of ticket revenue for a game, the insurance carrier pays the University for this loss.
Since the football game between Florida and Idaho was cancelled, the University refunded the purchase price to all ticket holders and placed a claim against Lloyd’s of London for the revenue the University stood to make on these ticket sales. End result? Although the score of the actual football game ended at 0-0, the University of Florida still walked away with a cool $1,800,000.00.
By now, you’ve most likely seen the stories about the large sinkhole that opened in Dunedin, Florida this week. The Dupre family was awakened early Wednesday morning to what sounded like someone noisily attempting to break into their house. Upon inspection, the homeowners were shocked to see that their entire back porch was sliding into a rapidly expanding sinkhole. The family, along with several neighboring households, were all immediately evacuated by the police and soon, both this home and the adjacent house were officially condemned by the city. As of this posting, the sinkhole has expanded to over 90 feet wide and almost 60 feet deep.
Those are the facts you’ve heard thus far from the media. What you probably haven’t heard is the long series of events which led up to this disaster. Approximately two years ago, Michel Dupre noticed cracking to his home and contacted his insurance company – Citizens Property Insurance Corporation (Yes – that’s right – good ole’ Citizens again!). After testing the property and realizing that sinkhole activity was causing damage to the Dupre residence, Citizens tried to force the family to accept minimalistic repairs to their home. The repair method mandated by Citizens only consisted of injecting grout into the soil beneath the home and made no allowance for any actual stabilization of the home. Insiders in the field will tell you that “repairing” a sinkhole home by grouting alone will fail to fix the problem over fifty percent of the time and will almost always cause additional damage to the home.
Take a look at the attached Standard Penetration Testing (SPT) boring logs from Citizens’ investigation of the Dupre home. When testing a property for sinkhole activity, engineers check the density of the soil by striking the drill bit with a 140 pound hammer and then noting how many blows it takes to drive the drill bit down 12 inches. (For instance, on SPT boring #1 you can see that at 15 feet below the surface it took 3 blows of the hammer to drive the drill bit down 12 inches). If you look closely at SPT boring log #3, you will note that there is a “WR” condition from approximately 25 feet below surface to 70 feet below surface. WR stands for Weight of Rod. In order for the engineer to record a WR condition, the drill bit must actually FALL UNDER ITS OWN WEIGHT without even being hit by the hammer. As you can see, beneath the Dupre residence, the drill bit fell OVER 45 FEET – which indicates that Citizens knew there was at least 45 feet of “nothingness” below the Dupre house! In spite of this finding, Citizens’ engineer only categorized the damage to the Dupre home as “slight” and noted that there was very little possibility of any further damage. (Bet he wishes he could take that back!)
The homeowners (understandably) had severe reservations about the minimalistic grouting program being pushed upon them by Citizens and therefore the homeowners hired engineers and other professionals to help encourage Citizens to properly repair the home. In spite of the clear evidence that Citizens’ mandated repair would be insufficient to repair the home and to protect the Dupres, Citizens refused to listen to the Dupre’s experts for over two years. Now you may have heard in the media that Citizens, “offered to pay the family $90,000 to repair the home”, but that is absolutely false. In fact, Citizens has only offered to pay the Dupres $1,500 (not a misprint – One Thousand Five Hundred Dollars) despite the all of the evidence (even from its own engineers) of the true cost to repair the home.
As I’ve referenced in previous posts, Citizens has spent over 100 million dollars fighting insurance claims and absolutely refuses to make any payment whatsoever on sinkhole claims. After two years of fighting for coverage, the Dupre family had no option but to let Citizens have its way with their home. After two days of letting Citizens stubbornly pump “grout” beneath their home….you guessed it! (And yes, that is a swimming pool you see below being squeezed down into the hole.)
Clearly, the Dupres are now going to “have their way” with Citizens – hopefully a jury of homeowners will help decide Citizens’ fate. But the question then arises – what about the neighbors? At least two homes have now been condemned and several others have incurred grevious damage as the direct result of Citizens’ actions -what recourse do these neighbors have? If they have sinkhole coverage, then these homeowners could look to their own policies for loss coverage, but why should these other carriers have to bear the burden of Citizens’ arrogance? What if the neighbors do not have sinkhole coverage? Unless the damage to their home mandates condemnation (and thereby activating coverage under the Catastrophic Ground Cover Collapse portion of their policy), these homeowners would have no recourse and would have to make any repairs themselves. Thanks Citizens!
Hopefully Mr. Scott and the rest of our elected officials in Tallahassee will take this situation to heart and will enact some real reforms at Citizens. If not, the voters of Florida should hold them accountable on election day. Because, who knows – you could be Citizens’ next victim.
By now, you may have seen the video of the sinkhole swallowing portions of a forest in Louisiana, but – like all classic films – it is worth seeing again.
This video should serve as a shocking reminder of the sudden and brutal nature of not only sinkholes, but of all natural disasters. Within the past few weeks, we have witnessed numerous sudden and catastrophic collapses – not the least of which include this scene in Louisiana, the violent collapse of the vacation condos near Disney World, and the numerous smaller sinkholes that have opened locally due to the heavy rainfall.
Now more than ever, it is important to check your homeowners insurance policy to verify that you have adequate coverage to protect your family in case your home suffers damage from sinkhole activity, hurricane, fire or other type of loss. Although you may not be able to prevent Mother Nature from having her way with your property, you can take steps to protect yourself from the financial impact of such loss and to get yourself back on your feet again.
Here in Florida, we tend to think that we have the exclusive right to complain about Flood Insurance and the rising premiums that go with it. Unfortunately, flood insurance and ever increasing premiums are a problem not only in other states, but in other countries as well.
For example, a recent article in the Tampa Tribune pointed out that payouts for flood insurance claims from a single event in Germany would soon top 4 billion dollars (not a misprint – that is billion with a “b”!) Over the past week, heavy rains in Germany, the Czech Republic, Austria, Slovakia and Hungary have cause extensive overflows of the Elbe, Danube and other rivers throughout the area. Insurance costs in Germany alone are estimated to run over 3 billion dollars.
But those shocking facts are not even the real story. The real story is that the total damage caused by this flood is estimated to be over 16 billion dollars! Why the huge difference between the estimated insurance claim payouts and the total estimated damage? The problem is that many residents have been unable to obtain insurance coverage for this hazard due to insurance companies refusing to issue such policies in the area. Even those who might actually be able to obtain such coverage, were not able to purchase same due to the prohibitively high cost demanded by the insurance carriers!
Unfortunately, the net result of this situation is that there are a lot of people out there with damaged or destroyed property (to the tune of 12 billion dollars!) and there will be no insurance or other funds available to assist them with the repair of their property or replacement of their personal items. Although it may be impossible to see into the future, you can always prepare for the future. Therefore, check your insurance policies today to make sure you have the appropriate amount and type of insurance. Although your flood insurance premiums may seem high, the cost of such insurance pales in comparison to the cost of replacing your property and personal items.
Despite no major storms or hurricanes hitting Florida since 2005, Florida property insurance rates have continue to skyrocket over the past few years – with no end in sight. Shockingly, a recent AP report showed that Florida’s Office of Insurance Regulation has approved more than 100 rate hikes per year since 2009. Where is the money going – surely not for claims!
The biggest “expense” an insurance company faces is the cost of reinsurance. Simply stated, reinsurance is an insurance product that an insurance company buys for itself to offset any claims it must pay. If an insurance company has a large number of claims in a given year, the insurance company submits a claim to its reinsurance company for reimbursement of the amount paid in claims. The only difference between a policy holder’s relationship with his insurance company and the relationship an insurance company has with its reinsurer is…..the insurance company most likely owns the reinsurance company as well!!! With this cozy relationship, an insurance company can jack up the rates that it must pay itself – er, I mean, its reinsurer – and thereby create an artificial “hardship”. The insurance company then squeals to the media and to the legislature that it can’t make any money in Florida unless they are allowed to further increase rates. Clearly, since an insurance company can set its own expenses (due to the fact that it can manipulate the money it pays to itself as a “cost”), it will never show a profit from its Florida operations! The Sarasota Herald Tribune wrote a Pulitzer Prize winning article on this concept in 2010.
Where does this leave the individual homeowner who is struggling to pay his ever-increasing property insurance premiums? Until our representatives in Tallahassee are willing to stand up to the insurance companies and their lobbyists, all Floridians will have to just wait and see what this year’s hurricane season has in store for Florida. Unfortunately, history has shown us that – whether a storm comes this year or not – we will be facing higher insurance premiums either way. You know – because of those “reinsurance premiums”….