Coastal homeowners who are insured through the Florida Windstorm Underwriting Association have known since January that their rates are going up. What they might not know is just how the premium increases will be implemented.
Rather than an across-the-board boost, the government-run insurer will dole out increases based on features it thinks make homes more vulnerable to hurricane damage.
For example, homes with sliding glass doors, shingle roofs and second stories will pay the most. Even common features such as garage doors and porches will be targeted as high risk.
An arbitration panel approved an average rate increase of 96 percent in January, over the objections of the Florida Insurance Department, which called the increases “unconscionable.”
The FWUA, which was established by lawmakers in 1970 to provide insurance to homeowners in the state’s most hurricane-prone areas, plans to begin implementing the increases July 1. The insurer covers 450,000 residential and commercial structures in coastal areas of Florida, including 18,765 in Volusia County and 6,984 in Brevard.
Ron Natherson, an FWUA spokesman, said the insurer feared current premiums wouldn’t be enough to cover damage from a major storm.
“Our rates have been historically low,” Natherson said.
The increases ultimately will save money for homeowners in inland areas, he said. If the FWUA’s funds were depleted because of a catastrophe, Florida law calls for the state’s commercial insurers to make up the shortfall. Those costs would be passed on to their customers in the form of rate increases, Natherson said.
FWUA customers can partially offset the increases by making some changes to improve the structural integrity of their homes, he said. For example, adding shutters or roof straps — metal straps that tie a roof to the rest of the house — can make a customer eligible for discounts, Natherson said. The FWUA recently broadened the number of discounts customers can receive
The rest of Florida’s property and casualty industry will likely follow FWUA’s lead. That’s because the state Legislature recently passed new building codes allowing insurers to charge more for certain home features, while simultaneously forcing them to broaden the number of discounts they give for structural improvements
Sam Miller, spokesman for the Florida Insurance Council, which represents the industry, said raising rates for the most high-risk homes is justified.
“The homes that are built the worst and are clearly going to be wiped out by a hurricane ought to pay more,” Miller said.
Brown & Brown purchase
Brown & Brown Inc. of Daytona Beach said it bought AmeriSys Inc., an Oviedo-based company that manages and analyzes information for insurers and health-care providers. AmeriSys will operate as a division of Brown & Brown, but will remain in Oviedo. The companies didn’t disclose the terms of the deal.
