Judge: Insurance discount forms are flawed

The forms used by Florida property insurers to calculate homeowners’ hurricane-protection discounts are seriously flawed and must be completely thrown out, an administrative law judge has concluded in a potentially groundbreaking ruling.

The decision could have far-reaching implications for homeowners who seek or receive wind-mitigation discounts for hurricane-proof upgrades made to their homes — especially for those homeowners who lost their discounts during a massreinspection program begun in 2010 by Citizens Property Insurance Corp., the state-supported insurer of last resort.

Administrative Law Judge Robert Meale concluded the forms don’t comply with a Florida statute that specifies six kinds of home reinforcements for which homeowners should be given discounts; he called the exclusion of certain kinds of discounts “arbitrary and capricious.”

For example, the forms include discounts for protecting windows from windborne debris but not from wind itself, he noted. And they exclude discounts for measures taken to protect doors, garage doors or skylights.

“There are tens if not hundreds of thousands of people who are impacted by this,” said Jack Stumpff, the South Florida smallbusiness owner who sued state insurance regulators and succeeded in getting the forms thrown out.

While the ruling’s effect could be widespread, no homeowner will see any chang- es anytime soon because the legal battle is still playing out. The Office of Insurance Regulation recently appealed Meale’s Oct. 19 ruling in state Circuit Court.

In recent years, Floridians have received billions of dollars in discounts on their property-insurance bills for strengthening their homes against hurricanes.

Window shutters, hurricane-resistant roofs and impact-resistant glass doors are some of the improvements that have helped homeowners save hundreds — or thousands — of dollars on their annual insurance premiums. Insurance companies also benefit because homes with stronger features hold up better during hurricanes, leading to fewer claims.