June 26, 2022

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Here’s how to keep home insurance costs as low as possible

The brochure from the North Palm Beach-based company that sealed Michael Burrow’s roof with a “special coating” makes a compelling claim: “Recognized by homeowners insurance providers as a re-roof.”

Unfortunately, it’s not true. Having your roof coated is not among the numerous measures Florida homeowners can take to minimize property insurance costs.

Other companies make similar claims. A Hollywood-based roofing company’s website boasts, “you can save money on your insurance” with its silicone roof coating, while a Boynton Beach-based roofer says its roof coating is “accepted by most insurance companies.”

Forced to look for new insurance this month, Burrows said no insurer was willing to apply a discount for the roof coating, which he contends will extend the life of his roof by years by preventing water intrusion.

“No insurer offers this discount,” says Mark Friedlander, director of corporate communications for the industry-based Insurance Information Institute.

Though “special coatings” won’t save you money on property insurance, there are legitimate ways to save money on home insurance.

With insurance costs rising and hurricane season fast approaching, here are some ways to cut costs.

“In Florida, you qualify for home insurance discounts if you make your home more resilient to windstorms,” Friedlander said. “This includes installing storm shutters, fortifying your roof, and installing wind-rated garage doors, wind-rated windows and wind-rated exterior doors.“

All of those and other home hardening items will qualify for a 6% state sales tax reimbursement beginning on July 1. Eligibility for the reimbursement will last two years. In addition, state grant funding will soon be available to help Floridians strengthen their homes.

The insurance reform bill enacted during the just-completed special legislative session also sets aside $115 million in state matching grant funding for storm hardening improvements. Qualifying applicants will get $2 in state funds for every $1 they spend, up to $10,000.

Home improvements funded through the program will qualify homeowners for discounts when they purchase new or renewed policies.

Details of how homeowners can qualify for the program have not yet been released.

Here are some other ways that you may be able to reduce your insurance costs:

The age-of-roof issue has dominated discussions among Florida lawmakers about how to stem insurance rate increases.

While most homeowners know that homes with the newest roofs command the largest discounts, many policies seek detailed information about those roofs.

What year was it replaced? What shape is it — flat, gable, hip or other? Hip roofs that slope down on all sides of the house are most resistant to hurricane-force winds.

Other factors include: roof materials, the type of attachments used to secure the roof deck, the roof deck material, whether there’s a layer under the deck for water resistance, and the wind speed it’s rated to withstand.

If you know your roof was built in accordance with the latest structural codes and is rated to withstand wind speeds and pressure rated for your geographic risk zone, you should of course make sure your insurer knows about it as well.

Over the past few years, some insurers — citing excessive claims and lawsuits stemming from aggressive roof repair solicitations — have refused to cover homes with roofs as young as 10 or 15 years. Many homeowners were faced with the expensive option of replacing a roof with years of usable life remaining or buy policies from state-owned Citizens Property Insurance Corp.

But reforms enacted during the special legislative session on insurance prohibit insurers from refusing to write new or renewed policies on homes with roofs less than 15 years old.

The new legislation also prohibits insurers from refusing to write new or renewed policies for homes with roofs over 15 years old if the policyholder submits an inspection report attesting the roof has five or more years of useful life left.

Standard roof policies have required insurers to fund full replacement of roofs when 25% or more of the roof is damaged by storms or falling trees, as required by the Florida Building Code. The new legislation will update the code to allow insurers to replace only the damaged portion if the roof was built to the standards of the 2007 or later versions of the code.

The reforms also allow insurers to offer discounts for policyholders who accept optional roof coverage deductibles of either 2% of their home’s insured value or 50% of the roof replacement cost. The deductible would not apply if the structure is a total loss, if the roof damage results from a hurricane, if the roof is punctured by a tree fall or other hazard, or if the damage requires repair of less than 50% of the roof.

Some companies have already received approval to sell policies that cover only the depreciated value, rather than the full replacement value, of roofs. These policies cost less than policies with full replacement value coverage.

Consumers who opt for either a roof coverage deductible or depreciated value coverage should consider whether they can afford to pay the difference out-of-pocket if they are faced with a sudden need for a new roof.

If your roof is not damaged and must be replaced because its at the end of its useful life, at least you can know that your new roof will be built to the specifications of the 2020 Florida Building Code revision, which strengthened requirements for roof assemblies.

A wind mitigation inspection will identify what protective measures your house currently has, and which ones you can add to maximize safety and minimize insurance costs. For an inspection that will cost about $150, you might discover that you are not getting credit for all of your entitled discounts.

Not all insurance companies in Florida allow policyholders to bundle their home and auto insurance, but many of the national companies do. Customers insured by large national carriers, such as State Farm, USAA, Progressive, Liberty Mutual, AAA and others can often realize significant savings by bundling.

If you have auto or home insurance through a large company, you should ask if there might be a possibility of bundling the coverage and getting a discount.

Most insurers request information about use of or access to a long list of safety devices and take answers into account when calculating coverage rates.

For example, your distance from fire departments and fire hydrants make a difference in what you pay because insurers expect that homes closest to them will sustain less damage if a fire breaks out. Policies filed by Universal Property & Casualty for approval by the state Office of Insurance Regulation, for example, asks whether applicants live under five miles or over five miles from the responding fire department. They also ask whether a home is less than or more than 1,000 feet from a fire hydrant.

Homeowners within the closest ranges should check to make sure they are credited.

Other preventative measures that you want to tell your insurer about include burglar alarms, fire alarms and sprinkler systems.

If you own an older home and haven’t replaced your windows and doors with modern versions made with impact-resistant materials, you should strongly consider doing so.

You will pay less if your house has impact-resistant glass and doors, including additional bracing on your garage door. These measures reduce the possibility your home will be penetrated by flying debris during hurricanes, which can destabilize the pressure in the home and can cause walls or roofs to collapse.

But to qualify, all openings must be protected, including all doors into the house, garage doors, skylights, and glass blocks.

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Various financing choices are available, including PACE (Property Assessed Clean Energy) programs that require no upfront investment. Homeowners qualify for a long list of energy efficiency and windstorm mitigation improvements as long as they have sufficient equity in their home and are current on their property taxes and mortgage payments.

Homeowners who choose PACE financing, however, should be aware that the debt will show up as a lien against their home. An annual repayment installment will be required, which can be escrowed by their mortgage servicer. Defaulting on the prepayments could lead to foreclosure, and federal mortgage guarantors Fannie Mae and Freddie Mac will not back loans with PACE liens. That means that in many cases the loan must be repaid in full before borrowers will be able to sell their home.

You have to decide on two different deductibles: A hurricane deductible that typically ranges from 1% to 5% of the property’s insured value, and the multiperil (non-hurricane) deductible that’s typically a dollar amount, such as $500 or $1,000. Opting for higher deductibles will get you a lower premium, but make sure you can afford the out-of-pocket expense if you have a catastrophic storm claim.

Insurance costs for many homes have increased not only because of rising rates but also because of inflation-fueled increases in what it would cost to rebuild your home. However, replacement values in some policies might be higher than necessary.

Some higher-value homes in South Florida are overinsured because consumers assume the insured value should be equal to their purchase price. But much of that purchase price results from land value, and the replacement value of their homes could be considerably less.

Your insurance policy automatically adjusts your replacement value for inflation, but if you suspect the replacement cost is too high, you can contact your insurance agent or hire a contractor or appraiser who will use industry-standard tools to bring your estimate up to date.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].