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Insurers tightening guidelines on homeowner’s discounts in South Florida

An article in the TC Palm tells only part of the story regarding hundreds of thousands of dollars in discounts on homeowner’s insurance that are apparently disappearing.
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The Palm reports that the state required insurers to offer double discounts for hurricane-safe structures after Wilma battered the area in 2005. And that the law changed after 2008 and 2009 to stem fraud and standardize the state’s home insurance discount guidelines. The paper said hundreds of thousands of homeowners hired inspectors to see if they qualified for discounts and after several years of hefty discounts, insurers reported that premiums were no longer keeping up with costs.

In reality, what happened is that the discounts being pushed by the state did prompt homeowners to hire inspectors. But what really drove the discounts was the fact that many insurers wrote policies that, by default, did not provide discounts for very standard features in most newer Florida homes, including fortified roof trusses. As inspection reports began trickling in, newspapers, including The News-Press in Fort Myers, began reporting that insurance premiums were being cut in half in some cases, thereby causing a flood of homeowners to seek inspections and apply for the discounts.

So the glut of discounts was not driven by the state’s double-discount after Wilma. But that did prompt inspections, which revealed that many homeowner’s policies were being written as if the homes were built in the 50s and 60s. In reality, most Florida homes are less than 20 years old and were eligible for many of the storm-resistant discounts that are almost standard with modern construction.

Having been caught at their own game, insurers began howling that homeowners with the tenacity to apply for the discounts for which they had always been eligible, were now cutting into profits.

In other cases, insurers were claiming that homeowners were fraudulently claiming improvements for discounts. Changes this year make it a crime for inspectors to provide false information about upgrades and require inspectors to include photographs of each qualifying upgrade and the signature of a licensed engineer, architect or contractor to verify accuracy.

The paper reports that other insurers have started going back to verity discounts are legitimate and, in some cases, removing discounts. Our Miami insurance claims attorneys find it ironic that insurers routinely point to staffing issues as the primary reason for lengthy claims resolutions. But now apparently have the staff to sort through thousands of discount claims that they have been forced to deal with by virtue of not notifying homeowners of their eligibility for discounts in the first place.
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If you are facing a dispute over an insurance claim in Florida, contact Alvarez & Barbara, LLP toll free at 866-518-2913 for a free and confidential consultation to discuss your rights.

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