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Navigating Florida’s complex market with extensive, current roof data

SUMMARY
  • Turmoil in Florida homeowners insurance is driving steep rate increases, often for less protection.
  • Legal and legislative setbacks over roof coverage are major factors in the upheaval.
  • Insurers can be better equipped to respond with reliable roof age and condition data.
  • Support for actual cash value calculations may become critical as coverage options evolve.

Homeowners insurers and their customers in Florida are navigating a turbulent market. Over the past year, many homeowners have seen double-digit percentage increases in their insurance rates, and for some, premiums have doubled—often for less protection with fewer options, according to The Palm Beach Post. The complex Florida market faces significant challenges from the increasing frequency and severity of claims. Three principal factors underlie this crisis:

  • Increased litigation, with Floridians accounting for more than 60% of property insurance lawsuits nationwide since at least 2016, according to the National Association of Insurance Commissioners
  • Higher catastrophe claims resulting from multiple hurricanes over the past several years
  • Rising reinsurance costs as the market hardens1

Roof coverage plays a prominent role in the upheaval in Florida.

Homeowners insurers and their customers in Florida are navigating a turbulent market.

Validating roof age is a long-standing challenge for many homeowners insurers.

Statutory requirements that insurers cover full roof replacement costs in most policies have figured into debates over reforming Florida’s market. Some roofing contractors are alleged to be inducing homeowners to replace their roofs while filing questionable insurance claims under assignment of benefits (AOB) agreements signed by policyholders. These AOBs empower contractors to negotiate claim settlements or even sue insurers on the consumer’s behalf, contributing to the flood of litigation in Florida.2

A court last year overturned a portion of legislation that sought to rein in alleged AOB abuses.3 Lawmakers returned in 2022 with new legislation aimed to tackle the AOB issue and enable insurers to offer less costly actual cash value (ACV) coverage as an option to bring some relief from soaring premiums. But that bill appeared unlikely to pass in the waning 2022 legislative session as of March 11.4

A clearer view with robust, reliable data

How can insurers push through the turmoil to achieve their unique goals? Whatever the objective—finding profitable opportunities, aligning a portfolio to risk appetite, or continuing to serve a distressed market—success can begin with more reliable data that provides a fuller picture of each property, including the roof. And there’s a lot to uncover.

Perhaps no single system has more bearing on a property’s insurability and risk pricing than the roof. It stands alone in cost, complexity, exposure to wear and tear, and protective function over the rest of the structure. Roof claims account for about 30 percent of all property loss payouts—a good reason to prioritize reliable roof data.

Roofing fundamentals

The average life expectancy of the most common roof cover is about 20 years. So, for homes aged 20 to 25 years, the roof age most likely matches the home’s age. But that may not be so for homes older than 25 years. Validating roof age is a long-standing challenge for many homeowners insurers, with inaccuracies costing them, as a whole, $1.31 billion in premium annually.

Roof age and condition don’t always align. Sometimes a roof may be newer, but severe weather and other events have accelerated its deterioration. Permit insights and advanced analytics derived from aerial imagery can help place underwriters virtually “up on the roof” for a better view of its remaining useful life and risk exposure.

Complicating factors

Beyond age and condition, other factors can further complicate the scope of roof risk for many insurers.

Solar panels, which have soared in popularity, carry potential risks related to improper installation, complications in firefighting, and repair and replacement. Permit data shows the rising potential significance of solar as a risk factor.

Roof age Florida market chart

Even the choice of roofing materials may vary, with suitability for the climate and cost both figuring into the equation.

A versatile approach to risk and replacement costs

As insurers choose how to respond and adapt to changing conditions, options, and requirements, the right tools could be critical to effective execution. These tools include identifying and verifying homes with newer roofs that may be less likely to have damage. And if ACV eventually becomes a more widely available option in Florida, a purpose-built ACV solution could provide powerful analytics to help insurers:

  • Gauge the depreciation costs of a roof
  • More reliably classify risk
  • Enable better management of roof-related loss costs
  • Help limit losses from older roofs

Placing the cash value as a dollar amount alongside the full replacement cost can help guide underwriting and inspection decisions.

Knowledge gained through solutions such as Verisk’s 360Value® Roof Actual Cash Value can also help insurers work with customers to determine the most appropriate coverage options based on needs versus cost. Insurers can guide where maintenance or replacement may help mitigate risk as a roof’s condition changes over the policy life cycle.

Calibrating and refining for better results

Verisk stands ready to help insurers take a closer look at their Florida portfolios. Analyzing an insurer’s book against key roof data points can help gauge how well current solution sets capture those factors at the point of sale and over time—and potentially identify opportunities for additional segmentation and more competitive rating.

Contact your Verisk representative to schedule a complimentary batch review of roof-related risk in your Florida portfolio.


James Roche

James Roche is vice president of property product management at ISO. He can be reached at James.Roche@verisk.com.

Sinthy Khamsaeng

Sinthy Khamsaeng is underwriting product manager for personal lines at Verisk. You can reach her at sinthy.khamsaeng@verisk.com.


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  1. Susan Salisbury, “Storm season on the horizon, insurance market in crisis as homeowners face huge increases,” The Palm Beach Post, May 7, 2021, < https://www.palmbeachpost.com/story/news/local/2021/05/07/insurance-market-crisis-homeowners-face-double-digit-increases/4977002001/ >, accessed on March 11, 2022.
  2. Oscar Miniet, “Florida personal lines coverage reaches crisis levels — Part 1,” NU Property Casualty 360°, December 28, 2021, < https://www.propertycasualty360.com/2021/12/28/florida-personal-lines-coverage-reaches-crisis-levels-part-1/ >, accessed on March 11, 2022.
  3. Andrew G. Simpson, “Federal Judge Halts Part of Florida’s New Property Insurance Reform Law,” Insurance Journal, July 12, 2021, < https://www.insurancejournal.com/news/southeast/2021/07/12/622173.htm#:~:text=Federal%20Judge%20Halts%20Part%20of%20Florida's%20New%20Property%20Insurance%20Reform%20Law,-By%20Andrew%20G&text=A%20federal%20judge%20has%20halted,and%20solicitations%20of%20roofing%20contractors. >, accessed on March 11, 2022.
  4. “Property Insurance Reform Bill Dies as Fla. Legislative Session Draws to a Close” Claims Journal, March 11, 2022, < https://www.claimsjournal.com/news/southeast/2022/03/11/309141.htm >, accessed on March 11, 2022.

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