Fla. Regulator Approves Changes to Wind Loss Mitigation Credits Under ISO’s Homeowners Program

February 24, 2003

The Florida Office of Insurance Regulation has approved Insurance Services Office, Inc.’s (ISO) homeowners program for insurers to provide homeowners premium credits for wind-loss mitigation features in residential properties.

The new legislation rescinds a previous wind-mitigation program designed to recognize protective devices over building openings.
The Office of Insurance Regulation has approved ISO’s program, which contains:

·wind mitigation credits for up to 26 percent of the wind portion of the homeowners premium;
·a minimum credit for only those risks that previously qualified for, and received,a credit under the state’s now-obsolete Windstorm Protective Devise Rule (shutters);
·a 15 percent credit for residential properties built after Jan. 1, 2002. The credit applies only to communities that participate in ISO’s Building Code Effectiveness Grading Schedule (BCEGS) program and have classifications of Grades 1, 2 or 3 for well enforcement of the latest building code;
·a 25 percent reduction to credits contained in the BCEGS program.

ISO’s BCEGS program was developed in the aftermath of Hurricane Andrew in 1992, which set a record for insured catastrophe losses.

The ISO program evaluates the effectiveness of local building codes to help identify how well homes and commercial structures in a given community will hold up to hurricanes, earthquakes and other natural disasters. Insurers now use ISO’s building-code evaluations as a key variable in underwriting residential and commercial property risks.
Under the statute enacted by the state, insurers are required to submit their individual discounts program for properties with the Office of Insurance Regulation by Feb. 28.

ISO has also filed with the Office of Insurance Regulation a schedule for percentage of credits that insurers may apply for wind-loss mitigation for dwelling and commercial properties.

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