Many Florida homeowners shelled out hundreds or thousands of dollars to fortify their homes against hurricanes in recent years to qualify for insurance discounts.
Some got them — for a while. This year, some homeowners are feeling the impact of changes to state laws that, in effect, reduce or erase many insurance discounts.
Howard Goldberg's windstorm insurance premium dropped 33 percent in 2009 when St. Johns Insurance accepted an inspection report that showed his Delray Beach house has shutters and steel-reinforced garage and front doors.
His premium went up slightly when he renewed in December. The real shock came eight months later, when St. Johns recalculated his rate, rejected some of the improvements, and raised his premium 69 percent, retroactively.
Goldberg changed insurance companies immediately, but St. Johns has not refunded the remainder of his annual premium. The company contends it's owed the higher rate for first eight months of the policy.
"This represents a money-grab," said Goldberg, who spent $8,000 last year to replace old panel shutters with accordions. "It's inevitable that insurance companies will go out of their way to deny credits."
Goldberg and others are feeling the impact of laws changed in 2008 and 2009 to stem fraud and standardize the state's home insurance discount guidelines.
After Hurricane Wilma battered Florida in 2005, the state required insurers to double discounts for hurricane-safe structures the next year. Hundreds of thousands of homewners hired inspectors to see if their homes qualified. Insurers granted discounts but, after a year or two, reported that premiums weren't keeping up with costs in part due to hefty discounts.
Insurers said homeowners were fraudulently claiming improvements for discounts. Changes that took effect this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and a signature of a licensed engineer, architect or contractor to verify the accuracy.
Some insurers have started going back to verify the discounts are legitimate.
Homeowners and some building inspectors say insurers are cutting legitimate discounts and worry that people may stop making hurricane-proofing improvements if they won't get discounts.
Some inspectors say colleagues hired by insurers are erring on the side of the companies. For instance, one inspector said he pulled a building permit that showed a policyholder's roof has a nail pattern that withstands hurricanes well. But he said the insurance company's inspector did not look at the permit and assumed the pattern was outdated because the nails are not visible. The homeowner's inspector didn't want to be identified out of fear that insurance companies wouldn't hire him in the future.
Jeff Rothberg, a building inspector who owns JR Inspection Services, said garage doors that met wind-resistant standards last year now need a "product approval" designation from one of several government agencies. It's not enough that a product meets the standards; if the developer or product manufacturer didn't apply for the designation, it's no longer eligible for a credit, he said.
Rothberg said the new regulations have gone too far in favor of insurers. For instance, this year's guidelines say the more hurricane-resilient, hip-style roof must cover at least 90 percent of a home's walls to qualify for a full discount. Last year, the requirement was 50 percent.
Russell Beck, executive vice president of St. Johns, said policyholders can get copies of the new guidelines.
"St. Johns Insurance Company always works with policyholders on issues of interpretation. We have received inquiries and requests for assistance from our policyholders through the Office of Insurance Regulation and typically resolve these inquiries in an expedited manner," Beck wrote in an e-mail.
State-backed Citizens Property Insurance, the state's largest home insurer, began reinspecting homes last year to verify the $700 million in discounts it provides annually. "Our goal for re-inspections is to have the features so well documented that the construction feature is apparent," said Candace Bunker, spokeswoman for the state-backed insurer.
"If a homeowner complains and believes we are taking away a legitimate credit, we work to make sure that we have correct information, that our action is warranted, and to communicate to the policyholder about how any deficiencies can be remedied if they wish to continue to receive the credit."
Regulators defend changes in guidelines on the discounts but continue to discuss how to improve them. "Many people have been receiving discounts that were inappropriate, and everyone else is on the hook for repairing their home if a storm hits," wrote Monte Stevens, a lobbyist for the Office of Insurance Regulation.
State leaders have stressed the importance of making homes stronger and invested more than $200 million of taxpayer money to do so through the My Safe Florida Home program from 2006 to 2009.
Bob Hunter, insurance director of the Consumer Federation of America, says regulators should intervene before people start doubting that insurers give discounts.
"There can't be any question that they're being applied fairly," Hunter said. "I think the insurance commissioner should immediately look into these kind of allegations and … reverse any of these decisions" to lower discounts if they're wrong.
Cheryl Glick, of Davie, continues to make home improvements, even though her discount has been reduced.
Glick, a bank employee, spent $14,000 on hurricane-impact windows a few years ago. and it seemed to pay off when her insurer offered a sizeable discount. This year, the insurer, St. Johns, wanted to increase her premium to $3,423 from $2,206.
She switched to Citizens, which offered her a premium of $2,447 after a $989 discount for hurricane-proofing. But, to lower her premium to that level, Glick reduced her coverage by more than $30,000 to $171, 000.
She's still hoping for a higher discount: She recently installed an insulated wind-resistant garage door at a cost of $2,600 and plans to replace her front door before asking Citizens to re-consider.
"Bottom line, I needed hurricane protection, and now I have it," she wrote in an e-mail.
Julie Patel can be reached at 954-356-4667 and firstname.lastname@example.org.Copyright © 2015, CT Now