You might not lose your full roof replacement insurance after all

Homeowners worried they’ll have to foot most of the cost to replace their roofs if they get damaged should be able to relax for at least another year — unless they need to find a new insurer.

The Florida House and Senate headed into different directions over legislation to stabilize skyrocketing home insurance costs.

The sponsor of a House bill removed a proposal to free insurers from having to pay the full cost to replace roofs damaged by windstorms, fire, fallen trees or other calamities. A Senate version with the proposal, meanwhile, is likely headed to the full Senate.

Chances are dimming that the proposal will survive any compromise bill that clears the full House and Senate, said Paul Handerhan, president of the Federal Association

for Insurance Reform, a consumer-focused watchdog group based in Fort Lauderdale.

“Unless the House changes its mind, the proposal in the Senate bill is not going to become law,” Handerhan said. “My gut feeling is if it was going to be in the House version, it would probably be in there already.”

The proposal would allow insurers to reduce roof coverage when their customers’ policies come up for renewal. Instead of providing full replacement coverage, insurers would be allowed to pay for just a portion of the cost to replace roofs more than 10 years old, depending on the type of roof.

That would leave customers responsible for the balance of the cost, which in most cases would run into thousands of dollars. Policyholders would have to pay

30% to replace a metal roof; 60% to replace a concrete tile, clay tile, wood shake or wood shingle roof; and 75% to replace the common asphalt shingle roof or any other roof type.

An average roof replacement costs $8,228, according to Homeadvisor.com. But upgraded materials, such as concrete tile, can drive the cost as high as $45,000.

The proposal would require insurers to pay for full replacement of roofs over 10 years old only if the house is a total loss.

Roof reform could create more choices

While removing the proposal would be welcomed by contractors, plaintiffs attorneys and advocates for low-income residents, Handerhan said that allowing limits would make some insurers more willing to cover older homes they currently see as too risky.

High claims and litigation rates have compelled many insurers to stop offering insurance for homes in Florida with roofs over 10 years old, leaving those homeowners with no choice but Citizens Property Insurance Corp., the state-owned “insurer of last resort” that subjects customers to costly surcharges if it cannot cover all claims after a catastrophic storm season.

Private market insurers will likely keep refusing to cover homes with roofs over 10 years old if the legislature fails to enact the roof replacement coverage reduction, Handerhan said.

“Insurance companies would be willing to write coverage if they are not on

the hook for the full cost of roof replacement,” he said. “If a homeowner is choosing between something and nothing, they’ll probably choose the something.”

Costs through the roof, insurers say

Insurers say they need to reduce millions of dollars in payouts caused by roofing contractors who aggressively canvass neighborhoods and give incentives to homeowners who allow them to inspect their roofs for damages. Because state building codes require full replacement of any roof with more than 25% damage, contractors have little trouble finding that much damage so they can bill insurers for the cost of a new roof, they contend.

When insurers balk at paying for the new roofs, roofing contractors sue the insurers, further driving up costs that must be spread among all homeowners in the form of rate hikes that averaged 20% to 40% this year and could be as high next year

without reforms, insurers say.

“The reason your rates are going up is that your neighbors are getting free roofs,” said Locke Burt, president and CEO of Security First Insurance Co. “But they’re not free. You are paying for it.”

Roofing contractors and their attorneys, however, say they are being unfairly blamed by insurers who want to avoid responsibility for paying legitimate claims. Insurers bring lawsuits upon themselves, they say, when they deny or underpay claims and force consumers and contractors to fight them in court.

Yet, a South Florida Sun Sentinel review of lawsuits against insurers last year by roofing companies found a list of roofing companies that have each filed hundreds of lawsuits against insurers between 2018 and 2020, including one with 1,054 suits, two that each filed more than 900 suits, and two others with more than 500 suits each.

PAUL SANCYA/AP Prospects are dimming for changes to Florida law that would allow insurers to roll back roof replacement coverage. That could keep insurance costs rising and private-market coverage hard to find, experts warn.