Thursday, December 14, 2017
Business

Florida homeowners improperly denied insurance discounts, judge rules

TALLAHASSEE — The forms used by property insurers across the state to calculate insurance discounts for homeowners are seriously flawed and must be completely thrown out, an administrative judge has found in a potentially groundbreaking ruling.

The decision could have far-reaching implications for homeowners who receive wind-mitigation discounts for hurricane-resistant measures in their homes — and specifically for those who lost discounts during a mass home reinspection program by Citizens Property Insurance Corp.

Because of a flawed study commissioned 10 years ago by the Office of Insurance Regulation, Florida homeowners may have been denied several million dollars in discounts for their garage doors.

"There are tens if not hundreds of thousands of people who are impacted by this," said Jack Stumpff, a Plantation small-business owner who successfully took on OIR in court and got the mitigation forms thrown out.

While the impact of the ruling could be widespread, no homeowner will see any changes any time soon because the legal battle is still playing out in court. OIR recently appealed the Oct. 19 ruling in circuit court, and is downplaying its potential impact.

"I don't think that people need to be concerned that they have lost a substantial amount of discounts for this," said Belinda Miller, the agency's general counsel.

A spokesperson for Citizens said the insurer of 1.5 million would await the results of OIR's appeal.

For the past several years, Florida homeowners have received billions of dollars in discounts on their property insurance bills for strengthening their homes against hurricanes.

Window shutters, hurricane-resistant roofs and impact-resistant glass doors are some of the improvements that have helped homeowners save hundreds — or thousands — of dollars on their insurance premiums. Insurance companies also benefit because homes with stronger features hold up better in hurricanes.

Property insurers across the state use the same forms to help calculate the proper discounts for homeowners. Last month's ruling by Administrative Law Judge Robert Meale found that the forms — written by OIR — are invalid because they failed to provide separate discounts for homes with wind-resistant garage doors. Those discounts are required by law.

Because discounts are dependent on each other, one flaw in the form can impact the size of every other discount. As a result, the judge nullified the entire mitigation form for all homes built before 2001, when the more comprehensive Florida Building Code was enacted.

"Due to the interdependency of loss relativities and discounts, these omissions and understatement also raise the real possibility of distortion among the other loss relativities and discounts," wrote Meale, hinting that homeowners across the state may have received incomplete discounts in recent years.

Stumpff, who sells a garage-door strengthening product called "Secure Door," said the lack of discounts for retrofitted garage doors has hurt his business. He filed a suit to get the discount forms changed.

"We did what we thought we had to do for our business and for all the homeowners out there who are not getting their discounts," said Stumpff, whose product is sold at Lowe's hardware stores for about $150. Installing the Secure Door product on an older garage door offers many of the same benefits as buying a new garage door, which can cost more than $1,000.

Wind mitigation discounts have been in the headlines this year as Citizens has embarked on a controversial campaign of reinspecting more than 250,000 homes across the state. Three out of four homeowners inspected by Citizens have lost discounts that they had previously been receiving, leading to an average premium hike of $800.

Citizens and other insurers recently began reinspecting homes under the premise that homeowners were receiving discounts they didn't deserve. Meale's ruling indicates that the reverse may be true.

The inspectors who fanned across the state this year to scrutinize homes were using deficient forms that omitted check boxes for discounts homeowners deserved, according to the ruling.

Allan Schwartz, a New Port Richey homeowner, said he spent $2,000 on a new, state-of-the-art garage door, but didn't get an insurance discount for it because his windows weren't also fortified. "This thing looks like Fort Knox," said Schwartz, who is covered by Citizens and recently had a reinspection. "They say if your garage door goes, your house goes."

Meale called OIR's omission of separate discounts for garage doors "arbitrary" and "illogical."

Studies conducted by state and federal agencies after Hurricanes Andrew and Charley found that many homes were destroyed when winds overpowered weak garage doors and rushed through homes. The pressure caused by the rush of wind caused roofs to cave in and walls to crumble.

As a result, several studies have found that fortifying old garage doors is one of the best ways to prevent wind damage during a hurricane.

However, homeowners who strengthened their garage doors were not rewarded with insurance discounts.

OIR said that even as it appeals the ruling, it will likely change the forms to account for garage-door discounts.

It's too early to say how much a homeowner might save by doing a retrofit, though Meale's ruling indicated the savings could be substantial.

According to OIR, the ruling does not require restitution for those homeowners who have been given incomplete discounts for the past few years.

Any lawsuits filed in attempt to recoup those lost discounts would be "frivolous," said Miller.

"A homeowner should mitigate their home, whether or not they're getting a discount from their insurance company, in order to protect their family and to prevent loss," she said.

Toluse Olorunnipa can be reached at [email protected] or on Twitter @ToluseO.

Comments
Pack your bags: 107.3M Americans to set holiday traveling record

Pack your bags: 107.3M Americans to set holiday traveling record

A record-breaking number of Americans are expected to travel this holiday season.The American Automobile Association projects that 107.3 million Americans will pack their bags and travel more than 50 miles by planes, trains, automobiles and other mod...
Updated: 3 hours ago
Local widowers say baby powder caused their wives’ cancer

Local widowers say baby powder caused their wives’ cancer

Two Tampa area widowers whose wives died of ovarian cancer are suing Johnson & Johnson, joining nearly 5,000 other plaintiffs across the country who blame their illness on the daily use of the pharmaceutical company’s talcum powder.Bryan Isa’s wife, ...
Updated: 6 hours ago
Jabil’s fiscal results top Wall Street expectations

Jabil’s fiscal results top Wall Street expectations

ST. PETERSBURG — Jabil Circuit Inc. beat Wall Street expectations for both profits and revenue Thursday.The St. Petersburg-based contract electronics manufacturer — one of Tampa Bay’s biggest public companies — posted fiscal first-quarter earnings of...
Updated: 7 hours ago
Soccer store opens on Gunn Highway, just in time for the World Cup

Soccer store opens on Gunn Highway, just in time for the World Cup

Even though the United States Men’s soccer team didn’t qualify for the 2018 FIFA World Cup, that hasn’t diminished local fans’ excitement about the upcoming international event.Ariel Martinez, owner of Best Buy Soccer and Lacrosse, has already receiv...
Updated: 7 hours ago
Tampa chamber names first companies for minority business accelerator

Tampa chamber names first companies for minority business accelerator

TAMPA — Four firms in marketing, construction and secure cash logistics will be the first to go to through a new Greater Tampa Chamber of Commerce program designed to help black- and Hispanic-owned companies grow their businesses through two years of...
Updated: 8 hours ago
FCC votes down Obama-era ‘net neutrality’ rules

FCC votes down Obama-era ‘net neutrality’ rules

NEW YORK — The Federal Communications Commission has voted on party lines to undo sweeping Obama-era "net neutrality" rules that guaranteed equal access to internet.The agency’s Democratic commissioners dissented in the 3-2 vote Thursday.The FCC’s ne...
Updated: 10 hours ago
From Crystal River to Brooksville, branch out to shop on these unexpected main streets

From Crystal River to Brooksville, branch out to shop on these unexpected main streets

You don’t have to stare at a greeting card to picture a bustling old main street lined with decorated shops and lampposts. Historic small-town shopping districts are easy to find, and more charming than Walmart. Beyond the downtowns of St. Pet...
Updated: 10 hours ago
American Social booming on Harbour Island

American Social booming on Harbour Island

HARBOUR ISLAND — Downtowners, conventioneers, hockey fans, concert-goers and anyone hungry for waterfront dining are discovering American Social Bar & Kitchen on Harbour Island. Panoramic views, accessible boat slips and walkability to Amalie Arena a...
Updated: 11 hours ago
A healthy dining option opens in Downtown Tampa

A healthy dining option opens in Downtown Tampa

SOUTH TAMPA— Vale Food Co., a health food restaurant, hopes to make its mark on the bay area foodie scene with the opening of its first location in Tampa.In 2014, Sunny Ilyas was a Florida State student trying to find an affordable, healthy meal for ...
Updated: 11 hours ago

Tampa Bay is above average in minority homeownership

Tampa Bay ranks 22nd among the nation’s 45 largest metro areas in the percentage of minority homeowners. According to Abodo, an online apartment marketplace, 46.2 percent of minorities in the bay area own their homes, which have an average value of $...
Updated: 12 hours ago