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March 1, 2021

Significant Changes to Homeowner Policies May Be on the Horizon | Tampa, FL

What happens when Tampa experiences a weather event that causes damage to the homes of its residents? These types of events cause damage by wind and wind-born debris like trees, tree limbs, and other items that can hit the roof causing damage. In most cases, the homeowner will realize there is damage and they will call a roofing contractor to evaluate and fix their roof damage. This typically happens when there is a leak or missing shingles. This type of damage is easy to spot and should be handled immediately.


Depending on the extent of damage, and age of the roof, a repair is sufficient. In some cases, the damage is too widespread, and getting your homeowner's insurance company involved is necessary. Having an experienced, qualified,  trustworthy roofing contractor to assess the situation is a good idea. They will be able to determine what the best course of action is.


In some instances, extensive damage warrants that homeowners will receive a full roof replacement, for just the price of their deductible. In this case, the homeowner is thrilled, the contractor gets paid, and the insurance company has to cover the loss. Most homeowners are pushing for this last scenario because roofs are expensive, so why not have your insurance company pay for them. But, before pushing for a new roof from your homeowner's insurance, there are a few things you need to know. You really need to take some time and think about who you let on your roof to help you through this process. Homeowners need to hire an honest, ethical company that will explain what needs to be done and why. The insurance market is changing in Tampa.


Over the years, there has been abuse in exploiting areas of a homeowner's policy, to get the insurance company to buy a new roof for a policyholder, especially when it's not warranted. That, coupled with some of the other abuses, has caused claim denials, rate increases, and policyholders to be dropped completely. Here are a few of the abuses we have seen in the Tampa area:


 Excessive Supplementing

When contractors get a claim settled, then submit change orders to the insurance company, that is called a supplement. Supplements are in place to allow additional money to be released for unforeseen issues on a claim. Some roofing contractors have shown a proclivity for manipulating circumstances in order to get more money than what was allotted for the initial claim, resulting in higher profits for their company. Why is this a problem? The homeowner gets additional work at no additional cost, the contractor makes more money... Win/Win...right? WRONG. Just like any other company, an insurance company is a for-profit, business.


As they lose more money due to circumstances such as these, they will need to find a way to prevent excessive losses in the future and recap their loss. The most rational way they can do this is to put limitations on the claims they will pay out on and to raise the premiums of homeowners throughout the state of Florida. It's worth noting, this is an issue for many planes across the US, but we will be speaking specifically to its impact here in our backyard.


Fabricating Damage

It is not unheard of for roofing contractors to fabricate storm damage on a homeowner's roof, for the sake of getting an insurance company to buy a new one. Hail strikes look like deep dimples on metal or shingle roofs. If a contractor is conducting a roof inspection to find storm damage and can't find any, they can use tools to try to mimic actual roof damage.


This will allow them to convince the homeowner that they should allow them to handle their claim, ultimately resulting in their roofing company making more money. While this allows the homeowner's full roof to be replaced, for only their deductible, this will typically result in an increase in their premium.


Needless claim submissions

Because the roofing company has nothing to lose by homeowners filing a claim and getting denied, they will encourage filing a claim even if there isn’t sufficient damage or the right kind of damage. Most of the people knocking on doors are just under-trained salespeople, they are not roofers.


They are commission-only sales and only get paid if the claim gets approved. So, they use the “let's submit everything” approach and see what happens. The problem is that it can negatively affect the homeowner if the claim gets denied. Even if the claim gets paid it can still have negative effects. We have seen people get canceled shortly after the claim is denied, tied up in lawsuits for years trying to get the claim paid, sent a letter demanding the roof is replaced or coverage will be dropped, and a host of other things. The thing to remember here is the ultimate loser if the claim is denied, is the homeowner.  The way things are structured now, it’s all upside for the contractor.


Recently, there has been legislation introduced that would now eliminate coverage to roofs that are 10 years old, or older. This could potentially have a significant impact on the residents of the Tampa, FL area. Even though the legislation didn’t pass, it speaks to the climate regarding insurance in FL. Insurance companies have already decreased the useful life of roofs.


Asphalt shingles are now classified as 10 years of useful life and tile, metal, and steel have all been dropped to 25 years. This means when your roof reaches these benchmarks, you will have to replace it or your policy will not be renewed, your premiums will go up, or you may not have replacement coverage.


For instance, if we were to be impacted by a storm that caused large-scale damage to your roof, we would no longer be able to pay your deductible to replace your roof. Deductibles are meant to make goods or services available at a fraction of the cost. In our experience, in Tampa, FL the average homeowner’s insurance deductible is around $2,000.


This means in the above example if your homeowner's insurance covers your roof replacement, you would pay only $2,000. The average cost for a shingle roof in Florida is $10,000. This is saving the homeowner $8,000 and when the system is not abused, that is how the process should work. All this comes back to hiring a roofing contractor that you can trust and who practices business with integrity. Should these changes to coverage be implemented on a large scale, it will be costly not just for those who abused the system, but all of us.


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