Florida Insurance Agents Say State’s Home Mitigation Effort Is Failing

August 13, 2009

  • August 13, 2009 at 12:42 pm
    intelman says:
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    Really…you think? There is massive incompetence and yes even fraud in this inspection process. Inspection companies are either just not dong things right or deliberately pumping up the mit features to make the homeowners (and condo building boards) happy. All of this is driven by stupidly large discounts for “a good roof” or class C shutters. The state is running a redistribution scheme by giving away private insurers money back to clients. The insanity as to stop and the rates HAVE to go up.

  • August 13, 2009 at 1:38 am
    WK says:
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    These statements are way too broad. I don’t for a minute believe all of these inspections are being done this way. I see wind mitigations done by the State certified inspectors and they even photograph the roof to wall connections, etc. Roof shape can be seen in a simple photo. We check permit dates for roofing also. I am sure there are bad inspectors and agents out there but this story makes it sound as if all are bad and not just a few. It sure is not worth my license and job to fake a wind mitigation inspection. The inspector I use won’t do an inspection or charge the client if he feels they have no features to receive discounts. I am not saying anything about the rates and pricing here. Just don’t do a story that puts everyone in the same boat as the people who do pull stunts like this.

  • August 13, 2009 at 1:59 am
    Arthro says:
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    Almost all of the contractors who come into my office offer a deal for homeowners – if they don’t save you at least as much as they charge, they will refund the difference to you. To me, that means that they have a built in incentive to fabricate the reports to make sure they earn their fees. If nothing else, this practice should be outlawed. It is fraud on an insurance company.

    There are a few good inspection companies out there, but there are a whole lot more crooks and hacks from what I’ve seen. I see a lot of out of work contractors trying to make a living and doing whatever they can to compete. Regulation on these is nowhere. The inspection process is BS.

    Wind mitigation discounts are a complete joke and need desparately to be changed. This required doubling with HB1A is one of the biggest reasons why insurers are pulling out of Florida and leaving the state in the hands of smaller companies who are mostly dependent on the $18 billion short Cat Fund. That’s not good for Florida.

    In addition, we see that McCarty made up the numbers about $4 billion in new capital coming into the state – it’s bogus. The amount of new capital that has come into the state since 2006 is more like $200 million, and no one is saying how much capital left. And when you combine that with the massive wind mitigation discounts, you have what we have in Florida – a property insurance system that is thinly capitalized and so fragile that everyone knows it will fall apart at the first major storm.

    Crist has no clue what he’s doing.

  • August 13, 2009 at 2:04 am
    DJ says:
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    Why do States reinvent the wheel every time? Not many new ideas for such credits on insurance policies. Several other States, especially some on the more vulnerable E coast of USA have such policies and credits and it has worked well for years. Thru such organizations as Nat Assoc of Ins Commissioners should share ideas that actually work and can be implemented with min of beaucracy being added. Do something that actually helps and works…what a novel idea for government?

  • August 13, 2009 at 2:23 am
    Inspector David says:
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    The state has been aware of the reckless approach of certain inspection companies since the MSFHP’s inception. Incompetent, $7 an hour employess conducting Wind Mits in which the failure rate for the “State Certified” classes was 70%.
    As an inspector that conducts these and other types of inspections, the only “carrot” that we offer is a free re-inspection, within 30 days of the initial inspection for homeowners to make the necessary corrections. That’s it, nice and simple.

    We service Dade, Broward and Palm Beach Counties and battle with homeowners daily as to what they have vs. what they need to qualify for the discounts. But agents need to step up to their responsibility as well, telling homeowners that if they have shutters they qualify. Well, we all know that older shutter don’t qualify and it only takes one opening that isn’t protected to blow the discount. In addition there are agents stating that if you don’t have shutters then you don’t qualify for ANY discount.

    There are multiple companies that not only service our area but state wide that offer incentives for agents to use their services. This is a direct conflict of interest considering the inspection companies “guarantee” premium reductions.

    The biggest flaw in the system is that there needs to be a formal certification created by the state in efforts of managing these issues.

    In the end, homes that meet the structural criteria should be rewarded with lower premiums and those whom are a high risk should pay higher premiums. The MSFHP should not have been a 100% pay to play scenario. It should have focussed on low to moderate priced homes with 100% of the door and shutter expense paid for and a pay to play for a complete re-roof. The 500k priced homeowner doesn’t need help with adding shutters. It’s the 125k elderly couple and the single mother of three that does.

    To add insult to injury, roughly 25% of the grant program didn’t even end up being spent in grants!

    Just a few thoughts!

  • August 13, 2009 at 4:02 am
    WK says:
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    It is interesting to see who approaches your agencies and what they offer. We receive information from companies all the time about their services but we only use two companies as one will go out further than our county than the other. Neither has offered us any kick backs or refunds or incentives. One has flat out told my client they had no items in their home that would qualify them for a wind discount and did not charge her since he did not provide the inspection. That is not fraud that is a good inspector. As I said he photographs the clips or wraps and other items to justify his report and is a good, honest inspector. My only comment on this story was it painted a broad picture that seemed to say there was nothing but fraud. If these people contact your agency I hope I can assume you don’t use their services. I also would bet you get wind mitigation inspections for your personal lines clients. Are you all saying none of your clients get wind mitigation credits? Are the reports you send in for them fraudulent? I am not talking about the mistakes Florida has made or rates or companies leaving Florida. My only issue was how FAIA’s comments bothered me and did not address the good inspections and those agents who do try to verify the facts on those inspections. The rules are what they are and we abide by them and use good inspectors with no money back, no gift cards, no refunds, nothing. We don’t want it and would not use someone who offered it. Some of us do play by the rules.

  • August 13, 2009 at 4:35 am
    SWFL Agent says:
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    Good points WK. We choose the inspection company that shows up on time (calls when they can’t),delivers the best service to the client, and makes sure the home owner signs the inspection form. There’s no incentive provided to the agency and we don’t expect it or want it. There is some fraud in the system and I do agree with the article that there are not many people spending money to upgrade homes. We have one carrier that is requesting a small number of “re-inspections” at their own expense. Also, one of the largest credits is for the FBC2001 roof. It will be interesting to see at what point this credit is removed as these roofs age.

  • August 13, 2009 at 6:04 am
    Arthro says:
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    Yes, there are a lot of good inspectors out there that play by the rules (ethically), but there are also too many who don’t. And there are also a lot of incentives for fraud, including kickbacks and guarantees of minimum discounts earned, etc.

    I agree w/ SWFL Agent in that there aren’t many homes that I’ve seen that are getting upgrades for wind mitigation features. More than anything, this has turned out to be a discount program and the true goal of encouraging Floridians to get their homes hardened is hardly an afterthought.

  • August 14, 2009 at 8:45 am
    Inspector Wife says:
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    It is important to remeber that there are hardworking, honest inspectors. My husband does everything by the book and climbs into every attic and comes out drenched. He takes pictures to back up everything that is on the 1802 and offers to provide these pictures to agents. It is disheartening to hear these comments. We did receive a call from someone saying another inspection company was offering a full refund if they didn’t save, asking if we would do the same. Of course the answer was NO! Too bad. This is a good incentive for homeowners.

  • August 14, 2009 at 3:29 am
    Inspector David says:
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    The idea that homeowners haven’t spent time and money retrofitting their homes is a rediculous statement. Outside the $150 million the state spent, there were the thousands of homes that were addressed via the storm seasons of 2004-2005.

    If a hurricane this size of Wilma hit in the same area this weekend, there wouild be a fraction of the damage that we saw then.

    If you doubt the statement that a significant amount of upgrades have taken place, just do a quick audit of the structual permits that were pulled in 2006-2008. You will be amazed.

    Not to mention, there was a significant amount of homeowners that should have been receiving their respective discounts and because of the burried “advisory” within their written policy and the lack of follow up within the insurance market, overpaid thousands in premiums for 2 or 3 years.

    But those certain individuals call for less regulation.



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