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Changes to Florida’s Property Insurance Laws that May Affect Your Home if Damaged by A Hurricane Tampa,  Florida

Lawmakers have made drastic changes to property insurance in the state of Florida. The new laws will have a significant impact on property insurance within the state. The new law took effect on May 26, 2022. Some of the important changes that will undoubtedly have a major impact on consumers include new requirements regarding when an insurance company can require a homeowner to replace their roof as a condition to receiving coverage, the allowance of a separate roof deductible, changes regarding property insurance lawsuits, new requirements of insurance companies regarding the handling of claims, changes regarding state grants under the My Safe Florida Home Program, and a new reinsurance law for property insurers. Below is a brief summary of some of the changes that you need to know.

When Can an Insurance Company Require a Roof Replacement?

The first very impactful change involves new requirements as to when an insurance company can essentially require a consumer to replace their roof in order to obtain property insurance coverage. The property insurance company cannot refuse to issue or renew a residential property insurance policy based solely on the age of the roof if the roof is less than 15 years old. If the homeowner’s roof is at least 15 years old, the insurer must allow the homeowner to have the roof inspected before requiring the roof to be replaced as a condition of issuing or renewing a property insurance policy. The homeowner must pay for the cost of the inspection. If the inspector finds that the roof has 5 years or more of useful life remaining, the insurance company cannot refuse to issue or renew an insurance policy based on the age of the roof only. These new requirements are meant to protect homeowners against being forced to choose between property insurance coverage and a high-cost repair to their home when the repair may not be necessary yet. At the same time, the law does allow insurance companies to require what would be a high-cost repair to the home when the end of a roof’s useful life is approaching. The main takeaway for consumers is that an insurance company can no longer refuse to provide coverage to a homeowner only on the basis that their roof is too old if the roof is less than 15 years old.

Law Now Allows for a Separate Roof Deductible in Property Insurance Policies

Your property insurance deductible may also be affected by the new law. Insurance companies can now charge a separate roof deductible. The roof deductible provision in the policy must be clear and unambiguous. The policy itself must contain specific language notifying the customer that they are selecting coverage containing a separate roof deductible, and that the roof deductible may result in high out-of-pocket expenses to the homeowner. Homeowners must also be notified of the actual dollar amount of the roof premium. If a roof deductible is applied to a loss, no other deductible can be applied under the policy. When a property insurance policy is up for renewal, an insurer may add a separate roof deductible if the insurance company provides notice of a change in the policy terms that is in compliance with the laws of the state of Florida. The property insurance company must also offer the policyholder the ability to opt-out and reject the separate roof deductible. These changes mean that consumers will now likely see roof deductibles added to their property insurance policies.

However, the new law also prohibits insurance companies from applying a roof deductible to a roof loss resulting from a hurricane, a tree fall, or other hazard that damages the roof and roof deck, a roof loss that requires the repair of less than 50% of the roof, or a total loss of the home.

Also, the law now treats the payment of a roof deductible differently than other deductibles under a property insurance policy. Previously, an insurance company was required to pay at least the actual cash value of the damage, minus the applicable deductible, and also pay any remaining amounts that are necessary to make the repairs at the time the repairs are performed. However, under the new law, if a homeowner has to pay a roof deductible, the insurance company can limit the first payment to the actual cash value of the damage until after the insurance company receives proof of payment of the roof deductible. Essentially, the property insurance company is now not required to pay for any remaining amounts that are necessary to perform the repairs as the expenses are incurred until the roof deductible is paid by the homeowner.

New Law Prohibits Transfer of Insurance Benefits to Get Roof Fixed Quickly After Damage Occurs

There were also changes affecting the ability to sue insurance companies. A homeowner can no longer transfer their rights to attorney’s fees to a service provider, such as roofers or other home repair specialists. This means homeowners are now likely left having to pay the upfront costs of repairing their homes unless they accept the notoriously low repair offers from the insurance company. If the insurance company fails to properly pay the homeowner’s claim, only the insured homeowner will have the incentive to bring a lawsuit to have the insurance company properly pay the claim. This means that there will now be an inevitable delay to the homeowner in having the necessary repairs made to their home. The new law also makes it easier for insurance companies to have their attorney’s fees paid by homeowners if lawsuits are not successful due to applicable notice requirements. Additionally, homeowners previously could sue insurance companies for acting in bad faith; however, the new law forces homeowners to first succeed in suing the insurance company for breaching the insurance policy before they can successfully prevail in a lawsuit for bad faith.

Insurance Companies Are Now Required to Keep Homeowners Informed and Process Claims in a Timely Manner

The new law also added some requirements that insurance companies must follow when handling insurance claims. The law now requires the insurance companies to conduct physical inspections within 45 days after being made aware of damage for claims that don’t involve a hurricane deductible. Once an adjuster is assigned to a property insurance claim, the insurance company must now notify the homeowner of their right to request a copy of any detailed estimate within 7 days of the adjuster being assigned. If the insurance company receives a request for a detailed estimate, it must send the estimate to the homeowner within either 7 days of receiving the request or within 7 days of the completion of the estimate, whichever is later. However, this change does not require the insurance company to generate a detailed estimate if one is not reasonably necessary for the investigation. The new law now requires the insurance company to provide a reasonable explanation to the consumer of the basis for the payment, denial, or partial denial of a claim. This explanation must be in writing. If the payment made by the insurance company is less than the amount in the detailed estimate, the homeowner must also receive a detailed written explanation that explains the difference. These changes are meant to encourage insurers to process insurance claims in a timely manner and to force insurers to keep their customers informed as to why they chose to pay the claim the way that they did. These changes help a consumer to stay informed as to how their claim is paid. The changes also help a consumer’s claim to get processed in a timely manner.

Grants Under the My Safe Florida Home Program

Next, the law changed some of the requirements that homeowners had to meet in order to receive grants under the My Safe Florida Home Program. Under this program, eligible homeowners can obtain state grants to improve their properties to make them less vulnerable to hurricane damage. The new law allows homes to be valued at $500,000.00 or less to qualify as opposed to the previous requirement that the home be valued at $300,000.00 or less. Another requirement is to have a hurricane mitigation inspection that occurs after the date of July 1, 2008. The new law also changed the date that the building permit application for the initial construction of the home had to be made from March 1, 2002, to January 1, 2008. This law also requires an inspection once the improvement project is finished. All grant money provided to the homeowner must be matched by the homeowner on a dollar for every two (2) dollar basis. The maximum amount that the state would contribute under the grant program also increased from $5,000.00 to $10,000.00. These changes will make more homeowners eligible for grant money and are meant to help more homeowners participate in the program. The changes are also meant to help insurance companies by driving down the costs of payouts for losses due to hurricane damage.

New Reinsurance Law for Property Insurers

Finally, the Reinsurance to Assist Policyholders Program was created to help insurance companies avoid some of the risks associated with property insurance claims. The reinsurance program allows insurance companies to transfer some of the risks associated with providing property insurance for hurricane damage to the state. This helps the insurance company avoid being solely responsible for the large payouts that result from hurricane damage to homes in affected areas. If an insurance company wishes to participate in the program, it must lower the rates offered to homeowners.

The recent changes to property insurance are complex and will have a significant impact on homeowners in the state of Florida. We are here to help. If you have any questions or need assistance with a property insurance claim, please contact us at (813) 254-7119.

Authored by Property Damage Attorney, Thomas McFadyen

Posted on behalf of Ligori & Ligori Attorneys at Law

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