Upgrades could lower premiums

A bit of relief is on the way for beleaguered South Florida homeowners: The discounts insurers now offer for strengthening homes against hurricanes, such as adding shutters or roof straps, could double by December.

The bottom line for consumers: bigger savings on windstorm insurance premiums.

In mid-August, state insurance regulators began revamping the mitigation discounts insurers are required to offer.

The goal is to provide a more specific, standardized discount for each type of hurricane protection added, moving away from the broad ranges insurers have used since 2002.

If mitigation is seen ``as the wave of the future, we need to give homeowners greater economic incentive'' to undertake these measures, Insurance Commissioner Kevin McCarty said on Thursday.

Lawmakers, insurers and regulators wrestling with the state's deepening insurance crisis now see mitigation as one of the best ways to save lives and reduce costs for the insurance industry and homeowners.

Field studies as well as analyses of the losses from the hurricanes of the past two years have shown that newer homes and those retrofitted to meet the current stricter building codes stand up better to massive storms.

The Office of Insurance Regulation already has the cooperation of State Farm Florida, one of the state's largest insurers, McCarty said.

Allstate Floridian, another major insurer, supports the idea of discount standardization as long as it doesn't ``cause overall homeowner rates to become inadequate for the risk being taken on,'' the company said in an e-mail to The Miami Herald.

Regulators also are working on creating a rating system to classify a home's strength to withstand a major hurricane. McCarty said Gov. Jeb Bush is a proponent of such a system.


These hurricane ratings eventually could be used together with revamped mitigation discounts to lower windstorm premiums.

Current discounts often leave homeowners wondering if they are applied fairly and uniformly.

Benjamin Scotchman is miffed that Citizens Property Insurance, the state-run insurer of last resort, will grant him only a $19 discount on his homeowners insurance premium even though he recently installed impact-resistant windows on his Plantation town house.

He wasn't expecting to recover immediately the nearly $17,000 the new windows cost, but he was hoping for a bigger discount to lower his annual bill of $3,200.

``These windows protect the property. In the event of a hurricane, I won't suffer any damage,'' says Scotchman, who is retired.

``I know this is an ongoing source of frustration,'' said Frank Kowalski, president and chief executive of Koski & Co. in Palmetto Bay. He's a member of Gov. Jeb Bush's newly created Property and Casualty Reform Committee, which is investigating possible short- and long-term solutions to the state's insurance crisis, including mitigation measures.

Right now, there's little recourse for consumers who are unhappy with discounts offered by insurers. They can, however, file a complaint with the Department of Financial Services' Division of Consumer Affairs.

The consternation for homeowners over these discounts stems partly from the broad ranges insurers are allowed to work with right now. For instance, Citizens, the state-run insurance pool and the largest insurer of homes in Florida, offers discounts ranging from 0 percent to 33 percent for shutters. Gulfstream Property & Casualty offers discounts of up to 46 percent for shutters, while State Farm offers up to 17 percent.

After Florida adopted a statewide building code in 2001, regulators instructed insurers to offer the discounts. A 2002 study done by the Department of Community Affairs analyzed the effectiveness of various mitigation measures such as roof straps or certain types of nails. Insurers used this study, plus their own underwriting guidelines, on factors such as the age of a home and its location, to set the discounts they wanted to provide to their policyholders. The wide disparity in discounts often mystifies homeowners.


For instance, Kim Chaney, Citizens' product development manager, said the insurer would consider impact-resistant windows as offering the same protection as shutters if a home's doors were protected as well. That's because research shows that keeping the wind out is the best protection for a home.

Without all doors protected, Citizens offers no discount for the stronger glass.

The insurance department, with the go-ahead of the Florida Cabinet and the insurance industry, also is developing a standard form that insurers can include with each policy to better explain how mitigation discounts are applied and calculated.

McCarty said all insurers are expected to follow the discount standards if they're adopted. Regulators will monitor how well they comply through consumer complaints and the insurance department's own investigations.


Most insurers reserve the largest discounts for new construction that meets the 2001 Florida building code, ranging as high as 47 percent. Other discounts for wind mitigation measures vary greatly, and only are applied to the wind portion policy. Homeowners can look up what their insurer is offering at

The site also contains an explanation about how the discounts are applied. Homeowners who believe mitigation credits aren't applied properly to their insurance premiums can contact the Division of Consumer Services at 800-342-2762.

Here is a sampling of the discounts offered by several


Company Device Discount Citizens Property Built after 2001 Up to 45% Citizens Property Shutters up to 33% Citizens Property Hip roof up to 23% Citizens Property Roof straps/clips up to 18% Citizens Property Impact-res. glass 0%* State Farm Built after 2001 up to 39% State Farm Shutters up to 17% State Farm Hip roof up to 41% State Farm Roof straps/clips up to 39% State Farm Impact-res. glass up to 17% USAA Built after 2001 up to 47% USAA Shutters up to 21% USAA Hip Roof up to 25% USAA Roof straps/clips up to 32% USAA Impact-res. glass 0% Gulfstream** Built after 2001 up to 46% Gulfstream Shutters up to 46% Gulfstream Hip roof up to 46% Gulfstream Roof straps/clips up to 46% Gulfstream Impact-res. glass up to 46% * According to website. Citizens says it will offer a discount if doors are protected

** Gulfstream was formed in 2004 to take policies out of Citizens Click on today's Extras for information on the insurance crisis, plus find out what your insurer is offering