Story Tools

Date of Issue: December 07, 2007

Insurance: Heartburn for Islanders over new Citizens rule

Anna Maria City Commissioner Duke Miller says it would cost thousands of dollars for him to comply with a new Citizens insurance requirement that calls for hurricane protection for all door and window openings on homes valued at $750,000 or more starting January 2009. Miller said the value of his house, built in 2000 and located near the Gulf of Mexico on the north end of the island, is less than $750,000 at present, but he worries that the Florida Legislature might reduce the threshold “and leave me holding the bag.” Islander Photo: Molly McCartney

A little-noticed insurance requirement scheduled to take effect in January 2009 is already giving heartburn to some Anna Maria Island homeowners.

The new rule says that homes in high-risk coastal areas with an insured value of $750,000 or more will not be eligible for coverage with Citizens Property Insurance Corporation unless the structure has storm-shutter protection that complies with the latest state building code.

While that may seem reasonable at first glance, Anna Maria homeowner and City Commissioner Duke Miller says the Citizens rule isn’t just or practical.

Citizens is the state-created insurance company, the insurer of last resort and the only source of wind insurance for many homeowners.

“My house is not valued anywhere near that $750,000 threshold, but I am concerned that they might lower the threshold and I will be left holding the bag,” Miller said.

The problem, he says, is that his house, which is located near the Gulf of Mexico, was built in 2000 to the code requirements in effect at that time, but to install storm shutters over his windows and doors would cost “thousands of dollars.”

Miller says he has tried to reduce the risk of wind damage to his house by covering his windows and doors with 3M security film, which the manufacturer says can “offer increased protection against falling shards of glass, debris, wind and water.”

“When the Legislature was talking about imposing this new requirement, they said it would cost about $3,700 to bring the average home up to code with storm-shutter protection,” Miller said.

But, he says, the actual cost is much higher.

“I have already spent $4,200 to cover 82 glass panes with security film,” he said, “so you can imagine what hurricane glass or hurricane shutters would cost.”

Miller also noted that there is no insurance discount for the security film he installed.

He described the results of the legislative effort behind this mitigation effort as “just crazy - they were planning all this on a different level from what the Average Joe would have to do to comply.” He warned that some homeowners are “looking at astronomical amounts of money to change their windows and doors to comply with the new rule.”


State representative meeting

Miller was one of two Island homeowners to raise questions about this new insurance requirement with Rep. Bill Galvano (R-68) and Christine Turner, director of communications for Citizens, at Galvano’s Thanksgiving open house on Nov. 20. Galvano, who represents Anna Maria Island and other parts of western Manatee County, has been a leader in efforts to find solutions to the state insurance crisis.

The other Island homeowner at the open house to talk to Galvano and Turner about the “impracticality” of the new insurance requirement was Norman Mansour, who also has a home in Anna Maria.

“There are three issues,” Mansour told TheIslander newspaper. “One is the cost. Another is the engineering - my house is elevated and, because of the design, I am unable to install roll-down shutters because there is not enough space for the mechanism.

“The third issue is operational,” he said. “Using some of the shutter-protection devices that go on and come off isn’t practical because I would have to find someone to go up 30 feet to do that before and after a storm alert.”

Mansour said he did an analysis of his home to determine his highest risk and is now taking steps to reduce that risk. “In one area, I had a Pella window engineer measure to retrofit two large windows and some French doors. And in two other areas, I have purchased and installed others kinds of systems that can work.”

He is now trying to deal with risk areas of his home where there doesn’t appear to be a practical or feasible solution. If he can’t find a solution, he said, his only alternative might be to go uninsured.

Mansour also cautioned that the $750,000 basis for the requirement could come down in the future. “When this bill was first introduced, the threshold was $300,000,” he said. “It was then amended to $750,000, but I would suggest this is only a foot in the door, because there are a lot fewer homes insured for $750,000 than for $300,000.”

Mansour said he doesn’t think his situation is that unusual.

He and Miller both reported that Galvano and Turner were “understanding” and “receptive” to their comments about the difficulties of trying to comply with the Citizens rule.

Galvano aide Mark J. Pinto Jr. said that nine people attended the open house to ask insurance questions, drink flavored coffee and sample some Thanksgiving treats.

Turner, who has relatives living in this area and has been visiting Anna Maria Island for many years, said the issues that came up in her conversation at the open house “were all over the map.” One couple expressed concern about pending rate increases with their carrier and wanted to know what options Citizens could provide. Several condo associations came in asking questions and seeking information.

“We also had people come in worried about the provision relating to the $750,000-and-up shutter requirement that goes into effect in 2009. The attitude of the people we met with was very positive, even those who had frustrating issues. They seemed to be very thankful to have an opportunity to meet one on one and get answers.”

Turner said this kind of meeting with citizens is “something that we do as a service that most other companies would not, so I find these meetings to be very helpful for us and for the public. We are able to learn what real issues are out there and our policyholders are given an opportunity to see that we have real people who care working for Citizens.”

Galvano said that he thinks it is worth taking another look at the requirement for shutter protection for $750,000 homes to see how much this can actually cost and at what point the cost for a home, based on its value, becomes prohibitive.

“We don’t want to create an impossible situation for people,” Galvano said, “but we do want to heighten homeowner responsibility in high risk areas or we will never get out of this insurance crisis.”

He said he would like to find a reasonable balance between those two points “so I can look with a straight face to the non-Citizens policyholder who is being assessed and at the same time talk to someone who is being asked to engage in mitigation (risk reduction).”


Larger struggle

The Citizens’ requirement for door and window protection is one example of a larger struggle aimed at making homes safer and holding down insurance costs, according to Steve Gilbert, a certified building official who works for the cities of Anna Maria and Bradenton Beach.

The Florida building industry, for example, is currently challenging a state re-roofing rule, based on Senate Bill 1864, that took effect Oct. 1 and that was intended to move the state closer to being storm-proof and to lessen the insurance crisis.

The rule requires that replacement roofs be brought up to code, including strapping the replacement roof to the walls of the home, in certain cases.

At issue is the way in which the law is being interpreted, Gilbert said. “This is a hot potato right now,” he said.

The Florida Building Commission, the state agency responsible for writing the rule, says that a homeowner, when re-roofing, should spend up to 15 percent on compliance.

But the building industry-which has filed a legal challenge of the commission’s interpretation of the law-contends that a homeowner replacing his roof must bring it into compliance with the new requirements only if the cost of that compliance is less than 15 percent of the total job.

“If compliance is going to cost you more than 15 percent, you shouldn’t have to do the compliance,” according to Don Fuchs, executive director of the Building Officials Association of Florida, a non-profit professional group.

“What happened,” Fuchs said, “is that this legislation may have been passed real fast and there wasn’t enough research. So maybe they didn’t look at the impact and cost for residents.”

There is also the mystery of the missing insurance adjustment for re-roofing compliance. Legislative supporters of the law say it was their intent to require that insurers adjust premiums for homeowners who re-roof in compliance with the new rule. But that requirement is absent from the final legislation.

Explained Fuchs: “Possibly there was some insurance lobbying.”