You might not lose your full roof replacement insurance after all

Article Courtesy of The Sun Sentinel

By Rin Hurtibise

Published April 24, 2021


Homeowners worried they’ll have to foot most of the cost to replace their roofs if they get damaged should be able to relax for at least another year — unless they need to find a new insurer.

The Florida House and Senate headed into different directions over legislation to stabilize skyrocketing home insurance costs.

The sponsor of a House bill removed a proposal to free insurers from having to pay the full cost to replace roofs damaged by windstorms, fire, fallen trees or other calamities. A Senate version with the proposal, meanwhile, is likely headed to the full Senate.

Chances are dimming that the proposal will survive any compromise bill that clears the full House and Senate, said Paul Handerhan, president of the Federal Association for Insurance Reform, a consumer-focused watchdog group based in Fort Lauderdale.

“Unless the House changes its mind, the proposal in the Senate bill is not going to become law,” Handerhan said. “My gut feeling is if it was going to be in the House version, it would probably be in there already.”

The proposal would allow insurers to reduce roof coverage when their customers’ policies come up for renewal. Instead of providing full replacement coverage, insurers would be allowed to pay for just a portion of the cost to replace roofs more than 10 years old, depending on the type of roof.

That would leave customers responsible for the balance of the cost, which in most cases would run into thousands of dollars. Policyholders would have to pay 30% to replace a metal roof; 60% to replace a concrete tile, clay tile, wood shake or wood shingle roof; and 75% to replace the common asphalt shingle roof or any other roof type.

Prospects are dimming for changes to Florida law that would allow insurers to rollback roof replacement coverage. That could keep insurance costs rising and private-market coverage hard to find, experts warn.

An average roof replacement costs $8,228, according to But upgraded materials, such as concrete tile, can drive the cost as high as $45,000.

The proposal would require insurers to pay for full replacement of roofs over 10 years old only if the house is a total loss.

Roof reform could create more choices

While removing the proposal would be welcomed by contractors, plaintiffs attorneys and advocates for low-income residents, Handerhan said that allowing limits would make some insurers more willing to cover older homes they currently see as too risky.

High claims and litigation rates have compelled many insurers to stop offering insurance for homes in Florida with roofs over 10 years old, leaving those homeowners with no choice but Citizens Property Insurance Corp., the state-owned “insurer of last resort” that subjects customers to costly surcharges if it cannot cover all claims after a catastrophic storm season.

Private market insurers will likely keep refusing to cover homes with roofs over 10 years old if the legislature fails to enact the roof replacement coverage reduction, Handerhan said.

“Insurance companies would be willing to write coverage if they are not on the hook for the full cost of roof replacement,” he said. “If a homeowner is choosing between something and nothing, they’ll probably choose the something.”

Costs through the roof, insurers say

Insurers say they need to reduce millions of dollars in payouts caused by roofing contractors who aggressively canvass neighborhoods and give incentives to homeowners who allow them to inspect their roofs for damages. Because state building codes require full replacement of any roof with more than 25% damage, contractors have little trouble finding that much damage so they can bill insurers for the cost of a new roof, they contend.

When insurers balk at paying for the new roofs, roofing contractors sue the insurers, further driving up costs that must be spread among all homeowners in the form of rate hikes that averaged 20% to 40% this year and could be as high next year without reforms, insurers say.

“The reason your rates are going up is that your neighbors are getting free roofs,” said Locke Burt, president and CEO of Security First Insurance Co. “But they’re not free. You are paying for it.”

Roofing contractors and their attorneys, however, say they are being unfairly blamed by insurers who want to avoid responsibility for paying legitimate claims. Insurers bring lawsuits upon themselves, they say, when they deny or underpay claims and force consumers and contractors to fight them in court.

Yet, a South Florida Sun Sentinel review of lawsuits against insurers last year by roofing companies found a list of roofing companies that have each filed hundreds of lawsuits against insurers between 2018 and 2020, including one with 1,054 suits, two that each filed more than 900 suits, and two others with more than 500 suits each.

‘Dramatic effect’ on low-income homeowners

During a March 17 hearing by the House Insurance and Banking Subcommittee, Rep. Bob Rommel, a Republican from Naples, announced he decided after meeting with “stakeholders” to remove the controversial proposal from an insurance reform bill he sponsored. Rommel did not identify the stakeholders, but contractors and plaintiffs attorneys have been outspoken in their opposition to the measure in legislative committee hearings so far this year. Rommel did not respond to requests to discuss his reasons for removing the proposal from his bill.

Democrats in the House and Senate have also voiced opposition to the proposed roof coverage rollback, saying low-income residents in their districts would be devastated by a sudden requirement to come up with thousands of dollars for a new roof.

Sen. Audrey Gibson, who represents part of Duval County, noted in a Senate Banking and Insurance Committee hearing on March 18 that millions of homeowners in Florida have roofs more than 10 years old. The change would have a “dramatic effect” on older homeowners with roofs that are “hanging by a thread” that they cannot afford to replace, she said.

Sen. Gary Farmer, a Democrat from Fort Lauderdale, predicted that homeowners wouldn’t know about the change, if enacted, until they filed a roof damage claim.

The Miami-Dade County Commission, meanwhile, voted unanimously on March 2 on a resolution urging state lawmakers not to enact the roof replacement reform proposal and directing the county’s lobbyists to oppose it. The proposal, according to the resolution, “may disenfranchise homeowners who have for years been paying their premium by allowing insurance companies to only pay a fraction of the cost to replace the roof, resulting in a substantial decrease in coverage for many homeowners throughout the state.”

But those arguments have so far failed to sway Senate Republicans who have advanced the proposal out of two committee hearings and seemed poised to do the same in a Rules Committee hearing before running out of time on March 18.

Supporters said that to keep home insurance affordable in Florida, homeowners will have to realize the need to replace their roofs when they reach the end of their useful life cycle and save money for that inevitable day.

Insurers would still be able to offer full replacement roof coverage as an optional add-on if the proposal is enacted, said Sen. Jim Boyd, a Tampa-area Republican and co-sponsor of the Senate bill.

Burt compared the proposal to auto insurance. “If you crash a 2016 Honda, you don’t get a brand new Honda. You get what a 2016 Honda is worth,” he said.