Ruling: Homeowners Improperly Denied Insurance Discounts
|By Toluse Olorunnipa, The Miami Herald|
|McClatchy-Tribune Information Services|
The decision could have far-reaching implications for homeowners who receive wind-mitigation discounts for hurricane-proofing their homes -- and specifically for those who lost discounts during a mass home re-inspection program by Citizens Property Insurance Corp.Because of a flawed study commissioned 10 years ago by the
"There are tens if not hundreds of thousands of people who are impacted by this," said
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
"I don't think that people need to be concerned that they have lost a substantial amount of discounts for this," said
A spokesperson for Citizens said the insurer of 1.5 million would await the results of OIR's appeal.
For the past several years,
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 during hurricanes, leading to fewer claims.
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
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
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
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 that fanned across the state this year to scrutinize homes were using deficient forms that omitted checkboxes for discounts homeowners deserved, according to the ruling.
"This thing looks like
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.
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