The Purpose of Mitigating Homes

After the hurricanes of 2004, legislation was established to help homeowners reduce their insurance premiums based on their home's ability to withstand a hurricane.  The goal was to offer incentives to homeowners who invested in mitigation techniques, upgrades or retrofits to make their home stronger.  The Office of Insurance Regulation released the Uniform Mitigation Verification Inspection Form as a standardized report for cataloging mitigation features in order to be eligible for these monetary incentives or discounts for homeowners who incorporate the latest storm damage mitigation products and technologies in their homes.  Homeowners were required to hire inspectors to professionally evaluate and identify the credits that home qualified for as well as what cost-effective upgrades homeowners could complete for additional credits to be applied. 

HURRICANE MITIGATION

Residential buildings can be effectively classified according to their degree of wind vulnerability.  That classification recognizes the fact that buildings with wind resistant features are expected to experience significant reductions in hurricane damage and loss.  The reduced risk and associated loss costs result from both basic house characteristics (roof shape, frame vs masonry, etc.) as well as structural features of the building envelope (roof deck attachment, hurricane straps, etc.).  While the existing house characteristics are in place and cannot be easily modified, the key building envelope features can often be upgraded and strengthened to provide notable reductions in vulnerability.  By rating structures based on wind vulnerability and risk, significant financial incentives, in the form of legislated reduced insurance premiums, credits and discounts, exist for homeowners who invest in hurricane mitigation retrofits. 

KEY COMPONENTS OF A MITIGATION INSPECTION

Year of Home / Number of Stories / Roof Covering / Roof Deck Attachment / Roof to Wall Connection / Roof Shape / Gable Bracing / Secondary Water Resistance / Opening Protection

When homeowners truly understand what mitigation upgrades need to be done to receive insurance premium discounts, many times these upgrades are conducted, just as the legislation was set up to do.  This is because the upgrades needed are often simple and/or cost-effective because many homes in high velocity zones, have some protection already in place.  Examples of mitigation upgrades include providing additional protection for one or more openings, bracing gable ends or installing Secondary Water Resistance during re-roofing projects.  In most all cases, the cost of mitigation upgrades is less than the discount you may be eligible to receive when the savings is calculated over the validity period of the inspection report:  FIVE YEARS!  The cost of upgrading your garage door may be $500, but the Hurricane rating your home would then qualify for, MAY be as much as $700 to $1000 per year!* (figures are estimated and vary based on property location and insurance carrier.)

How you can take advantage of discounts:

Most homeowners will need a licensed or certified professional (general, residential or building contractor, building inspector, a registered architect, engineer or certified building code official) to inspect the home to identify potential mitigation measures and legally verify improvements. 

Eligible homeowners can also apply for a free inspection through the new My Safe Florida Home Program by visiting www.mysafefloridahome.com or calling toll-free 1-800-513-6734.  To be eligible, Floridians must live in single-family, site built homes.

How much do these improvements cost?

The costs of the improvement projects vary.  Contact Island Homes of the Keys, Inc. for an estimate. Homeowners may be eligible for a matching grant up to $5,000 through My Safe Florida Home Program if they live at least 6 months out of the year in a single-family, detached, site-built home that meets the following criteria:

*  was built before March 1, 2002;

*  Has an insured value of $300,000 or less;

*  has a valid homestead exemption;

*  is located in the wind-borne debris region; and

*  has undergone a wind inspection.

Grant funds must be used for opening protections, which includes windows, skylights, gable vents, doors and garage doors, and bracing of gable ends.  To be eligible for a grant for opening protection, you must protect all openings identified by your wind inspection report as needing hurricane protection.

Alternatively and regardless of the year of construction, if you meet the minimum fixtures and constructions requirements of the Florida Building Code you have the option to reduce your hurricane-wind deductible from 5% to 2%. 

Citizens Property Ins. raising costs by looking at details

TALLAHASSEE, Fla. – Jan. 3, 2012 – Florida-owned Citizens Property Insurance can increase its rates no more than 10 percent per year, but the company has two options that allow it to raise rates without impacting that cap: nixing discounts some homeowners receive for hurricane mitigation efforts and increasing a home’s replacement cost in the premium calculation.

Hurricane mitigation discounts

Florida homeowners get a property insurance discount if their home has added features that help lower potential damage from a storm. To receive the discounts, homes must first be inspected, and a number of policyholders have done so. However, Citizens claims that the original inspections have listed hurricane mitigation upgrades that don’t exist, and many homeowners don’t deserve the discount.

As a result, Citizens is reinspecting homes, and, according to the Palm Beach Post, only about one in three homeowners keeps a hurricane mitigation discount after the reinspection. About 78,000 Florida homeowners have been reinspected so far, and the ones that lose a discount end up paying about 24 percent more – an additional average of $717 per year. Up to 200,000 total homes are slated for reinspection before the end of 2012.

Replacement costs

Even though home values have decreased, many owners have watched their replacement cost – the amount it would take to rebuild a destroyed home following a disaster – increase. And as the replacement cost increases, the cost of property insurance increases. For some policyholders, their home’s replacement cost is double its value in today’s market.

Citizens says it used a private vendor, 360Value, to calculate replacement costs. However, Citizens says it will reevaluate the calculations for South Florida and Tampa homeowners this month.

“In light of publicly expressed concerns about some of the replacement cost valuations generated by 360Value, Citizens will supplement its normal contract monitoring to include a targeted review to validate the accuracy of 360Value outputs,” Citizens said in a release.

Source: Palm Beach Post, Dec. 22, 2011, Charles Elmore

© 2012 Florida Realtors®