January 17, 2014 Slide 3 Background – Whats FIRM? Grassroots group founded in February 2006 Grown from 32 neighbors in Key West to 5,000 members Keys-wide Run by volunteers and funded by donations Currently a 501(c)(6) organization Not-for-profit, but donations are not tax-deductible Allows us to advocate and educate Successfully worked to lower windstorm rates for Monroe residents and for insurance reform statewide OUR MISSION: To advocate for, promote and encourage the promulgation of fair, impartial and actuarially sound windstorm insurance rates for owners of commercial and residential properties within the geographic boundaries of Monroe County, Florida.
January 17, 2014 Slide 4 2008 Insurance Legislation CPIC rate freeze extended until January 1, 2010 New 2010 rates must be actuarially sound Use and file repealed until January 1, 2010 Homestead distinction eliminated CPIC may offer wind-only coverage where not available in the private market CPIC Coverage exemption now applied to two- million dollar homes
January 17, 2014 Slide 5 2008 Insurance Legislation (continued) Greater transparency required CPIC rates must be vetted through Florida Public Hurricane Model Private firms must share trade secrets with OIR OIR must have access to all factors used in rate- setting Consumers must have access to rate-filings via website Consumers who challenge claims must have access to all their files
January 17, 2014 Slide 6 2008 Insurance Legislation -- Additional Provisions Citizens Property Insurance Corporation Consumers cannot be taken out of CPIC if the premium of the new provider would exceed that of CPIC by 15% or more Coverage of manufactured and mobile homes built before 1994 will be limited to cash value (not replacement value) Consumers must have 180 days written notice of cancellation CPIC may not file an administrative review or judicial challenge to an OIR finding A task force will be convened to return CPIC to its former status as an insurer of last resort
January 17, 2014 Slide 7 2008 Insurance Legislation -- Additional Provisions Citizens Property Insurance Corporation (continued) As of January 1, 2009, any home with an insured value of $750,000 or more must have shutters to be insured by CPIC. As of January 1, 2011, any buyer of a residential property (regardless of insured value) located in the windborne debris region must receive a written disclosure of the structures windstorm mitigation rating from the seller. A prior stipulation that homes constructed after January 1, 2009, within 2,500 feet of the shoreline must be built to code-plus standards in order to be insured by CPIC has been eliminated.
January 17, 2014 Slide 8 2008 Insurance Legislation -- Additional Provisions Citizens Property Insurance Corporation (continued) Assessments to cover existing CPIC deficits will now kick in when CPIC deficits exceed 6% of their projected direct written premium for that year. Emergency assessments may be required when/if regular assessments are insufficient to recover the existing deficit, and may be levied for as many years as necessary to eliminate the deficit. Such emergency assessments may not exceed 10% of the amount required to eliminate the deficit or 10% of the statewide premium, whichever is greater. If a new deficit is incurred after 2008, all CPIC policyholders may be levied a surcharge of up to 15% for a period of 12 months to cover the deficit. Should CPIC actually collect surcharges in excess of any deficits, the excess will remain with CPIC to offset any future deficits (and the potential for any future surcharges or assessments).
January 17, 2014 Slide 9 2008 Insurance Legislation -- Additional Provisions General Property Insurance Providers Mitigation Commission will bring consistency to application of mitigation credits pursuant to the uniform home grading scale by February 1, 2011 As of January 1, 2010, anyone purchasing a home over $500,000 in insured value must receive written disclosure from seller of the structures windstorm mitigation rating. Insurers must pay undisputed claims amounts within 90 days of receipt of the claim
January 17, 2014 Slide 10 2008 Insurance Legislation -- Additional Provisions General Property Insurance Providers (continued) Capital Build-Up Incentive Program allows start-up companies to build the capital required to satisfy regulatory standards of solvency by taking funds from the state in exchange for surplus notes from the insurer open to insurers that commit to increasing their writings of property insurance, including wind
January 17, 2014 Slide 11 Work with FIU to determine if Monroe County factors are accurately addressed in the FPHM Factors include: Construction history (building code, height restrictions) Geography (linear island string, undeveloped mainland) Meteorological history Topography (wind versus flood) Construction costs (labor and materials) Will address: Residential dwellings Condominiums Commercial properties FIRM Next Steps
January 17, 2014 Slide 12 Monitor all rate filings Participate in ongoing and new task forces Work for permanent repeal of use and file Lobby for dedication of windfall sales tax for hurricane-related uses Work towards a federal catastrophic mechanism, similar to flood insurance FIRM Next Steps (continued)
January 17, 2014 Slide 13 Practicalities – INSURANCE PREPAREDNESS Take detailed, dated photographs of your home and belongings prior to hurricane season Provide a set to your insurance agent Secure a set in a waterproof container Gather all paperwork (deeds, drawings, plans, receipt) related to your dwelling and secure in a waterproof container Review your policy with your insurance agent to make sure coverage is appropriate
January 17, 2014 Slide 14 Practicalities – CPIC CLAIMS HANDLING IMPROVEMENTS Significantly increased claims handling staff Moved to electronic claims handling Educated outside adjusters in advance of hurricane season Created mobile units to respond quickly Empowered field adjusters to distribute ALE checks on site Built redundancy into call handling centers
January 17, 2014 Slide 15 Practicalities - MITIGATION Mitigation factors all work together to save you money. There are four significant factors that can reduce your premium: Shutters. Class A, B or C shutters can save you up to 33%. If your home is compliant with the current Florida Building Code, either through new construction or renovation, you may be able to save up to 45%.
January 17, 2014 Slide 16 Practicalities – MITIGATION (continued) Roof Discounts. How your roof is connected to your walls can save you money. Hurricane straps are a big help.
January 17, 2014 Slide 17 Practicalities – MITIGATION (continued) Roof Discounts. How your roof is covered can also save you money. A small mitigation credit is available for metal roofs. However, there is no pre-designated space on insurance applications to account for these discounts. Ask your agent to make a special note if you have a sheet metal roof to qualify for a discount. FIRM continues to advocate for greater discounts for metal roofs due to their superior performance.
January 17, 2014 Slide 18 Practicalities – MITIGATION (continued) Construction. A hip roof may save you up to 23%. SIMPLE HIP ROOF A gable roof with the ends brought together at the same pitch as the rest of the roof. PYRAMID HIP ROOF A hip roof built on a square base with eaves of the same length.
January 17, 2014 Slide 19 Thursday, June 12, 2008 4:00 to 7:00 p.m. Harvey Government Center in Key West Forum will be taped and broadcast on the government channel Attendees will include: Insurance Commissioner Kevin McCarty Representatives from CPIC FIRM You! CPIC Policyholder Forum
January 17, 2014 Slide 20 Get Information at: www.FIRMkeys.org