Welcome to the Key West Townhall Meeting Prepared by the Grassroots Organization F.I.R.M. Fair Insurance Rates in Monroe May 24, 2007

January 17, Agenda Welcome- Teri Johnston Representative Ron Saunders Condo Rates-Teri Johnston/Heather Carruthers Questions/Answers Citizens Task Force-Heather Carruthers Mitigation – Teri Johnston Close- Teri Johnston

January 17, Good News Citizens current rate frozen until 2009 Increased uniformity of statewide building code Elimination of panhandle exemption Establishment of windstorm construction task force Establishment of code plus building criteria More consistent application of mitigation credits Mandatory 90-day claims resolution Expansion of definition of High Risk Accounts to include interior areas Possible elimination of Citizens distinction among Personal Lines Accounts, Commercial Residential Accounts, and High Risk Accounts

January 17, FIRM Condo Strategy Duplicate our residential strategy Financial Impact Comparative Data Mitigating Factors Meteorology Profit and Loss

January 17, Escalating insurance premiums are devastating our economy. The last Citizens increase (from $16.92/thousand to $20.91/thousand) represents $35 million dollars of lost disposable income of Keys residents. The proposed 44% increase (which has been eliminated) would have represented $79 million dollars out of our pockets. Effect of Skyrocketing Windstorm Premiums on Monroe County

January 17, To date FIRM has not been able to organize or collect data from the over 300+ Condo Associations in Monroe County. Firm needs a representative sampling of Condominium Association Insurance data for analysis. We need a copy of your Association Declaration pages from the past 3 years. Financial Impact

January 17, Comparative Data We need to know WHO is insuring your Association so that we can investigate rates statewide. Are Monroe County Condominiums being treated differently from the rest of the state? We have the following information on Citizens Insurance but what about your Building insurance.

January 17, Estimated 2006 Citizens Condo Windstorm Premiums on $350,000 Coverage From CPIC filing for combined building & contents for a 5-unit building, 2 or more stories high effective August 1, 2006 $5,201 $5,093 $2,793 to $5,201 $5,201 $5,093 5,201 $10,831 to $13,125 $5,201 $2,793 to $5,201

January 17, Mitigating Factors Monroe County is especially well equipped to deal with hurricanes. Monroe County has the strictest building codes in the state of Florida, requiring buildings to withstand 150 MPH gusts. Key West has the largest wood-frame historic district in the nation, with thousands of buildings that have withstood storms for over a century and a history of construction to endure the sometimes harsh environment. Many historic buildings have been significantly reinforced over the past 30 years. The low population density of the Keys translates into fewer housing units and lower potential storm exposure..

January 17, Meteorology Many areas outside of Monroe County have experienced tropical storms as frequently as or more frequently than Monroe County. Cityyears between tropical storms Hollywood2.60 Deerfield Beach2.60 Boca Raton2.60 Ft. Pierce2.65 Florida City2.65 Key West2.70 Miami2.70 Ft. Lauderdale2.70 Stuart2.75 Lake Worth2.75 Spring Hill2.75 Jupiter2.87 Pensacola2.93 Jacksonville3.00 Marathon3.14 SOURCE:

January 17, Insurance Claims Per Policy in Selected Counties – Wilma & Katrina County Citizens Policies in Force (HRA) Storm Citizens Windstorm Claims Wind- strength Relativity Claims Paid per Policy Monroe24,632Katrina$22,542,608baseline$915 Palm Beach 58,352Katrina$120,286,077similar$2,061 Collier9,388Katrina$31,582,635similar$3,364 St. Lucie1,652Katrina$9,220,467lower$5,581 Monroe24,632Wilma$22,927,392baseline$931 Dade85,270Wilma$198,031,608similar$2,322 Property damage per insured property from the same storms is lower in Monroe than elsewhere in Florida. Wilma and Katrina are prime examples. TO READ: In Katrina, wind strengths were lower in St. Lucie County than Monroe County, and Citizens windstorm claims paid were higher. SOURCE: Citizens Property Insurance and the National Weather Service

January 17, Profit and Loss FIRM needs your condo historical data so that we can compare premiums collected vs. claims paid.

January 17, F.I.R.Ms Approach Building strength analysis Analyze premiums paid vs. claims paid compared to other areas of the state. Need feedback from YOU!

January 17, Condo/Commercial Rates: What We Know Today Only 5 companies writing the majority of condo association policies vs. 30 companies writing condo unit owner (residential) policies. Citizens represents 57% of the market. Very little competition. A national standard is used instead of a state standard to distinguish what is inside versus outside of the walls. Potential for litigation as unit owners and association may differ over where responsibility for damage lies. Much of the condo market consists of mega-buildings (Century Village, high-rises along Key Biscayne, etc.) which represent very high PMLs

January 17, Condo Data Collection 1. Need to see who is insuring Condo Associations- Are the coverages and rates varying between companies who are insuring the Building 2. Why are there only a small number of companies willing to insure the Association. Why do they appear to be a higher risk?

January 17, F.I.R.M.s Focus Forward Permanent elimination of Use and File Condominium Rates Federal Catastrophe Insurance Mitigation Education Continued Improvement in Citizens

January 17, Stay Active in Tallahassee Since forming, FIRM members have traveled to Tallahassee on 7 occasions to lobby for fair rates for Monroe County and to monitor legislative actions that could potentially impact our county.

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Members: Insurance Advocate General Bob Milligan Representative Julio Robaino Senator Mike Fasano Mike Twomey, Attorney Mike Lancashire, The Main Street America Group Tim Loftin, Citizens Property Insurance Heather Carruthers, FIRM

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Mission: Resolve outstanding Citizens Property Insurance Windstorm Claims from the 2004 and 2005 storm seasons (due July 1, 2007) Improve customer service on claims handling side (due July 1, 2008)

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Findings from first meeting Legislative intent behind creation of Citizens was for it to be non-competitive Citizens was woefully unprepared for the 2004/2005 storm seasons 2 staff claims adjusters in staff claims adjusters in 2005 Over half of call center activities outsourced to firm on West Coast (suffered Wilma damage) Received up to 40,000 calls per day after Wilma Outsourced nearly all adjusting, much to out-of-state adjusting firms already taxed due to Katrina Used outmoded paper filing and tracking system for all claims Over 30,000 claims filed in Wilma

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Steps CPIC has taken to correct problems Many new hires Currenty 61 adjusters on staff Goal is to have 75 staff adjusters by end of 2007 Staff adjusters will manage outsourced adjusters if needed Call switching moved to satellite Expanded call center in Jacksonville Mobile units created to provide on-site adjusting and processing post-catastrophe Claims tracking gone paperless

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Problems identified to date About 5% of claims from 2004/2005 unresolved Citizens has 8,500 agents Most insurers have a few hundred in Florida Need to improve agent/Citizens/consumer communications Public adjuster conflicts Incentive to extend claims conflicts Lack of certification for adjusters Lack of education on local building codes and practices

January 17, Task Force on Citizens Property Insurance Claims Handling & Resolution Next meetings Monday, June 4, 2007 in Tallahassee Wednesday, June 13, in Pensacola Tuesday, June 19 in Ft. Lauderdale Nova University (Rose and Alfred Miniaci Performing Arts Center, 3100 Ray Ferrero Jr. Blvd., Ft. Lauderdale, Fl 33314) Public Input WELCOME 2:00 to 4:00 p.m. 6:00 to 8:00 p.m.

January 17, What YOU can do - 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, What YOU can do – MITIGATION (continued) Roof Discounts. How your roof is covered and how it is connected to your walls can save you money. Hurricane straps are a big help.

January 17, What YOU can do – 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, Mitigation Inspections Any licensed contractor can complete your inspection except for shutters Shutters must be inspected by a licensed engineer, registered Architect or Building Code inspector.

January 17, Closing Remarks We have proven that we do have a voice and can make an impact. Stay active, educated and involved. This fight is FAR from over. Thanks to Representative Saunders and all of you for taking the time to join FIRM this evening.

January 17, Send Information to: FIRM PO Box 5882 Key West, Florida

January 17, /Fax Information to: Fax: