Low-cost inspection can help you save on windstorm insurance

Article Courtesy of The Sun sentinel

By Harriet Johnson Brackey
Published September 2, 2007


Word is getting around about a way to cut windstorm insurance premiums. You won't necessarily have to change a thing, and you could save thousands of dollars.

"That's pretty good, isn't it?" says Wayne Cochran, who recently chopped his windstorm premium by more than $2,000.

The key: A windstorm mitigation inspection. An inspector checks your home's construction, from the roof to the garage door, to see how it would stand up against hurricane-force winds. The inspections typically last a half hour and cost around $150.

Cochran's Silver Lakes home, off Miramar Parkway, has hurricane shutters and has never suffered flooding even though it's on the water. When his windstorm insurance shot up to almost $7,000, he felt he had to do something.

He tried the usual things, such as talking with his insurance agent and raising his deductible to 5 percent. That brought the premium down to about $4,800. Then he took the advice of a friend and hired a private windstorm mitigation inspector. The inspector verified that Cochran's 1998 home had plenty of built-in protections.

He showed his insurance company the report and down came the premium to about $2,600.

"What I paid the inspector is just nominal compared to what I saved," he said.

It's tempting to make a joke about Cochran shouting about the good news, because he's a preacher. Cochran has been the pastor of the Voice for Jesus Church near Miami Lakes for 26 years, but he's best known for the rhythm and blues classics he belted out as a soul singer with his 18-piece band, the C.C. Riders, in the 1950s and '60s.

His experience with this program is shared by some other smart South Floridians who jumped at the chance to lower their windstorm insurance bills.

"Like everyone else, we were concerned about what was happening with insurance," said Gus Selimos, a software consultant who lives in Plantation with his wife and two sons. When his premium doubled for this year, Don Meyler Inspections helped Selimos cut it dramatically; it's now 25 percent less than in 2006. His home is only 3 years old.

"It totally shocked me," he said. "I feel like I owe the inspection company and the people there a lot."

Actually, this one comes from Florida's state legislators and regulators.

They haven't been able to get insurance companies to slash their rates, despite this year's special legislative session and the resulting insurance reforms adopted into law. But they set up the system for homeowners to get discounts, starting in 2005, when the Florida Legislature required insurers to offer them, and in 2006, when the Legislature established a free windstorm mitigation inspection program.

Late last year, the state Office of Insurance Regulation issued a ruling requiring insurers to offer larger discounts to those who have hardened their homes against storms. Those discounts are going into effect now, as regulators review and approve each company's new rates.

Here's how all this came about: After Wilma blew through Florida in 2005, insurance premiums soared. Also on the rise was sales tax revenue that came from all the rebuilding and hurricane repairs.

From that extra money, in 2006 the Florida Legislature allocated $250 million to launch a pilot program of inspections and rewards for homeowners who had installed storm shutters and other protections in their homes.

Free inspections are available -- to certain consumers -- through the My Safe Florida Home program -- but any homeowner in Florida who wants to hire a home windstorm mitigation inspector can do so. Both Cochran and Selimos paid for their inspections.

The requirements from state regulators to offer discounts apply to all residential windstorm policies, so the state's Office of Insurance Regulation says condo unit owner windstorm policies are included. Condo association policies, however, are not.

Few people seemed to know about the availability of the discounts. Some insurers had given customers a price break on hurricane protection measures for several years beforehand, says Scott Koedel, chief operating officer for Don Meyler Inspections, the Margate firm that is the largest windstorm inspection firm in the state. But before premiums began to soar in 2005, Koedel says customers didn't seem to notice.

Now, "There are traumatic situations out there," says Nick Hernandez, head of Building Inspections Team Enterprise Corp. in Miami, which inspected Cochran's home. "There are retired people who are not sleeping well and not eating right, and then they get hit with $2,000 increases."

The real payoff for consumers came about this year, after all insurance companies were required to accept a standard inspection form, a change that inspectors say makes the process go more smoothly. And, as regulators approve each company's filings for larger discounts -- so far, no filing has been rejected -- more companies are now offering them.

Justin Glover, spokesman for State Farm, which last year raised its premiums by a statewide average of 52 percent, says the company has doubled its discounts to policy holders who have strengthened their homes.

Even so, many homeowners don't know they have what it takes to get these price breaks.

The average homeowner who hires Koedel's company saves 18 percent -- without making any improvements to the home. That's because homeowners can get credits for features they don't know bring them insurance discounts, such as reinforced exterior walls. One sample taken by the My Safe Florida Home program showed 80 percent of homeowners could have had discounts but didn't ask for them.

Of course, if a homeowner is willing to go to the expense of adding protections to the home, the discounts become even more significant. One Lauderhill homeowner who added impact windows and sliding doors saw his premium go from $4,300 to $1,600 after the inspection.

Selimos, the software consultant who was able to cut his premiums deeply, had a good idea about how to spend his insurance savings: "I'll use it to pay my property taxes," he said.