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Wind-Borne Debris Regulations Affect Insurance

Terri Salt Costa

The risk of hurricanes and tropical storms continues to limit the availability of property insurance coverage in the state of Florida.  In 2002, the state of Florida created Citizens Property Insurance Corporation in an effort to provide insurance coverage to persons who could otherwise not find private insurance.  Commonly referred to as “Citizens”, this not for profit entity has become the state’s largest homeowner insurer, and therefore its policies and procedures have far reaching affect throughout the state.  In the past year many homeowners have received requests from Citizens for documentation as to the age and condition of the insured structure or have been required to perform building modifications in order to obtain an insurance policy or renewal of an existing policy.  For example, the insurer may require information on the remaining useful life of a roof or may require roof replacement prior to renewal of a policy.  Citizens employs a rating system to determine the level of home improvement that would be required for insurance purposes. 

Changes adopted by the Florida Legislature impose additional requirements on certain homeowners insured by Citizens.  Florida Statutes section 627.351 (6) provides that as of January 1, 2009, if the replacement value of the home exceeds $750,000, and if the property is located within a “wind-borne debris region” (“WBDR”), then  Citizens will not insure the home unless it has “opening protections as required under the Florida Building Code for a newly constructed residential structure in that area.”  The statute goes on to say that a residential structure shall be deemed in compliance “if it has shutters or opening protections on all openings and if such opening protections complied with the Florida Building Code at the time that they were installed.”  Adding “opening protection” to a home can be accomplished two ways:  a) replacing windows and doors with a product designed to meet impact resistance guidelines or b) adding qualified external protection devices such as shutters over doors and windows.  Protection of doors and windows reduces damage from flying debris that occurs during heavy storms.   The opening protection requirement applies to areas of the state that fall within the WBDR and includes areas where the basic wind speed is 120 MPH or greater. A WBDR map for the state of Florida shows that nearly all of Sarasota County and the western portions of Manatee and Charlotte counties are located within the WBDR.

Whether current windows, doors, or shutters meet the insurance standards will be a question facing homeowners whose replacement value is at least $750,000.   With possible window ratings of “basic”, “glazed,” “not rated,” and “hurricane,” it will be confusing to many homeowners as to whether their windows are in compliance.  The website for Citizens found at https://www.citizensfla.com contains further discussion about these ratings.  It is likely that inspection by a qualified inspector will be required before insurance is issued or renewed. 

When purchasing real estate in Florida, consideration should be given as to whether insurance can be obtained and whether the purchase contract protects a purchaser who cannot obtain insurance. When entering into a purchase and sale agreement consideration should be given to one of the following alternatives:  1) include an inspection clause that allows the purchaser the opportunity to cancel the contract within a specified time period if the buyer is unable to verify the availability of insurance; or 2) for properties where the replacement cost is $750,000 include a representation from the Seller that the home has opening protections that meet the requirements of Florida Statutes section 627.351(6).  The cost of insurance may vary depending on the age and location of the structure.  Some buyers may want to have the opportunity to terminate the contract if the cost of available insurance exceeds budgeted expectations.  The inspection clause can be modified to provide that the buyer can terminate the contract within a specified time if the buyer is unable to confirm the availability of insurance at a price acceptable to the buyer.  

This article was written by Terri Salt Costa, board certified real estate attorney, and Mark Loveridge, land planner.  For more information, please contact Terri Salt Costa at tcosta@williamsparker.com or (941) 329-6617. 

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