Mike Vogel 2021-05-08 07:28:20
The Good News — Wind …
More than a quarter of the state’s homes have been built or remodeled according to the tough statewide building code adopted after Hurricane Andrew.
Images of Florida homes devastated in hurricanes obscure an encouraging trend: Florida’s housing stock is growing more resistant to hurricane winds.
Florida’s a national leader when it comes to its statewide building code, the nation’s strongest for windstorms. Since Florida adopted the statewide code in 2002, builders have pulled some 1.59 million single-family home building permits — equal to 28% of the state’s single-family homes.
The statewide code is “making the entire state much safer,” says Miami engineer John Pistorino, who has consulted with Florida government bodies for decades on building codes.
Hurricane Irma in 2017 now is remembered for setting off the largest mass evacuation in Florida’s history, for producing $20 billion in Florida damage and for its death toll — particularly the 12 people who died after the storm in the heat at a Broward nursing home without air conditioning. Irma first devastated the Caribbean and Keys before making a second Florida landfall near lowlying Marco Island as a Category 3 storm with 115 mph sustained winds.
There, it was almost more notable for what it didn’t do. Destruction was limited. Marco Island chief building official Raul Perez says the difference between the performance of new and old construction was drastic. Marco’s development dates to the 1960s. But on average, 40 homes a year are torn down for new construction or remodeled to the new code — along with new construction on vacant lots. “The biggest takeaway is the code worked,” says Perez.
“We are seeing statistically significant improvements in the performance of residential housing in hurricanes,” says University of Florida engineering professor David Prevatt, who has done studies for the Florida Building Code Commission on areas hit by storms.
The share of hurricane-resistant homes is likely higher than 28%, though it’s impossible to quantify exactly how much higher. That increased share includes a smattering of pre-World War II houses built at a time of robust construction methods using stronger materials than in post-war decades. Additionally, the share includes homes built in Southeast Florida after Hurricane Andrew in 1992 as that region moved faster than the rest of Florida in mandating tougher construction. The share is further increased by a number of homes constructed to higher standards than mandated by local communities. A Mexico Beach house that brushed off Hurricane Michael’s impact in 2018 was built to a code-plus standard — known as “fortified” — developed by the Insurance Institute for Business & Home Safety.
Most significant for hardening the state, each year an estimated 2% of owners of existing homes elect to install new windows or put up new roofs. By law, the work has to follow the current code. Rebuild Northwest Florida, an organization formed after Hurricane Ivan in 2004, helped fix 3,000 stormdamaged homes and then in 2007 and 2008 got government funding to harden 14,500 homes to be more storm-resistant. A study is under way to see how the hardened homes fared in recent windstorms. The preliminary sense: “The houses we had hardened fared very well,” says retired tax attorney Garrett Walton, who was the volunteer CEO of Rebuild.
The hardening of Florida shouldn’t be overstated — upward of 70% of Florida houses don’t meet current code. UF’s Prevatt says the pre-code homes, in fact, could do worse as they deteriorate with age.
The older the home or roof, the harder it is to find an insurer willing to take it. That’s why Citizens Property Insurance, the state-subsidized insurer of last resort, reports 54% of homes in its standard pool — homes largely off the coast — are older than 40 years. Only 1% were built in the last decade.
The trend toward a tougher Florida looks to continue. The code gets regular updates with new ways to reduce damage from storms. An exemption for some parts of the coastal Panhandle from storm panels or impact-resistant windows went away after 2007. Tampa Bay was added to South Florida as an area where windows and openings must be protected from wind-borne debris. “We’ve got several things going on in a positive direction,” says Florida engineer Tim Reinhold, formerly with the Insurance Institute for Home & Business Safety.
The next code iteration, for example, requires sealing roof decks so that water, when shingles blow off, doesn’t pour in the gaps left to allow for plywood to expand in the Florida heat. “It’s going to save millions of dollars,” says Leslie Chapman-Henderson, president and CEO of the Federal Alliance for Safe Homes in Tallahassee.
Engineers, insurance industry researchers and authorities like Chapman-Henderson say more could be done. Chapman-Henderson pushes for every house in Florida to have shutters or impact-resistant windows. In Hurricane Michael, investigators for the Federal Emergency Management Agency found the new code kept buildings from collapse but both old and new suffered exterior damage. The FEMA evaluation found a need for better enforcement of the code and compliance by builders and contractors. Asphalt shingles went flying in new code buildings. FEMA recommends the industry find out why. Few jurisdictions required inspections during construction of roof, wall coverings and soffits — “in-progress” inspections. The evaluators weren’t encouraged by seeing roofing contractors failing to follow code in repairs.
“There’s still unfinished business. Florida’s doing a good job, but it’s not finished and never will be,” says Chapman-Henderson. “It’s just a continuous process. Every disaster tells a story of the opportunities for improvement in how we build.”
… The Not-So-Good News — Water
Windows may not break, but water gets in around them.
Craig Fugate, Florida’s emergency management division director under Gov. Jeb Bush and later FEMA head under President Barack Obama, says of Florida, “I think against wind we are getting more resilient.” But, he adds, “Water is a different matter.”
Indeed, tougher homes remain standing after storms, but interiors still get soaked. Evaluators from the Federal Emergency Management Agency after Hurricane Michael in 2018 found that homes built to the new code stayed intact but often exteriors didn’t perform well — vinyl siding was singled out — allowing rain to penetrate and cause costly damage. “It’s going to be tough for people to understand something as simple as water can leave the homeowner with extensive losses rivaling the value of the house,” says University of Florida engineering professor David Prevatt.
Damage tolls from hurricanes likely won’t diminish because product manufacturers and builders haven’t solved water intrusion. Miami engineer John Pistorino explains that winds of 30 to 40 mph will push water into a home around windows that can withstand 175 mph winds without breaking. “None of them can really provide the water protection people think they are getting,” Pistorino says.
Engineer Tim Reinhold, formerly with the Insurance Institute for Business & Home Safety, agrees. “We’re not doing a really good job of keeping the water out yet. You’re going to have water problems at really low winds.”
FEMA, after Hurricane Michael, found evidence of mistakes in window and door installation that let water in. But it also suggested standards for water infiltration need to be raised. Once water gets in, unless fast action is taken — hard to do without electricity or when unable to return to the home — mold takes off.
STATUS REPORT
Insurance — a Sea of Red Ink
The Legislature passed a bill in its 2021 session making major changes in Florida’s property insurance markets. Time will now tell whether it will help Florida-based property insurers stanch losses that doubled in 2020 from 2019. For three years running they’ve lost money on underwriting.
Among other provisions, the new law allows for Citizens Property Insurance, the provider of last resort, to raise its premiums by as much as 15% a year instead of the current maximum of 10%. The law also includes measures to blunt the onslaught of litigation that state Insurance Commissioner David Altmaier told legislators is responsible for the losses and the resulting rate increases. Florida, Altmaier says, accounted for 76% of homeowners insurance litigation nationally in 2019.
Insurers likewise blame unscrupulous contractors canvassing neighborhoods and soliciting homeowners to file unwarranted claims. The insurers also fault attorneys and state law and Supreme Court decisions that allow attorneys for property owners to collect their standard fees — and sometimes multipliers on top of those fees — from insurers when they win, but not the other way when they lose.
“People say, ‘why are my rates going up?’ This is why,” says William Stander, executive director of the Florida Property and Casualty Association, which represents Florida insurers. “Florida’s increasingly very risky.”
In opposition, some contractors and attorneys blame insurers who are slow or unwilling to pay legitimate claims, a tiny minority of bad actors and rising reinsurance costs after disasters nationally. “Reinsurance rates are going up everywhere in the United States,” says Chip Merlin, an attorney who represents cities, condo associations and other large clients with claims against insurers.
Insurers have responded to the losses by filing for rate increases of 20% to 40% or more and cutting risk by ditching customers with older homes and especially those with roofs older than 10 years. Florida Insurance Consumer Advocate Tasha Carter says she hears weekly from people facing daunting premium increases or who can’t find insurance. Carter says reinsurance went up 54% last year and litigation is up 210% in the past seven years.
The current cycle has exposed homeowners throughout the state to a level of difficulty getting affordable coverage that Miami-Dade, Broward and Palm Beach residents long struggled with. The acronym SOLO — for Seminole, Orange, Lake and Osceola counties — is now as notorious in the industry as Southeast Florida, with a significant increase in roof and water damage claims resulting in costly policies or lack of available insurance coverage. “This has really proliferated through the entire state,” says Kyle Ulrich, CEO of the Florida Association of Insurance Agents.
Industry consultant Guy Fraker reports it costs Florida insurers 36% more to provide coverage than it costs carriers to provide the same coverage in other catastrophe-prone states. Florida policyholders paid out $487 more for the same insurance as in other states in 2019, a number projected to rise to $866 this year, Fraker says.
As insurers offload risk, Citizens has grown. Its operating losses since 2013 total near $690 million. The number of litigated claims has gone from 27,000 in 2013 to 80,000 in 2019.
Citizens has been living off investment gains on its $6.4 billion in reserves. Citizens Chairman Carlos Beruff has said that’s unsustainable.
If Citizens runs through its reserves, it essentially levies a tax first on all its customers and then on all Florida property, auto and other insurance customers — whether in Citizens or not — to cover claims.
Citizens’ policy count increased 26.4% last year to 551,613. Earlier this year, it reported it was adding 3,000 customers a week. It expects to absorb 150,000 policyholders by year-end as private insurers shed risk. Unlike private insurers, Citizens can’t mitigate its risk through geographic diversification.
Flood Error
Thinking your property is immune to flooding because it’s not on a flood zone map could be a costly mistake. A post- Michael report from FEMA found that properties in the highest flood risk area averaged $95,000 in damage. Those not in the special risk area averaged worse — $110,000. Craig Fugate, former FEMA head and now a consultant, says flood losses are expensive — especially when lost power allows mold to proliferate on soaked drywall. FEMA grants to individuals peak at $33,000. The average grant is perhaps a fifth of that, though low-rate loans are available. “The federal government isn’t going to bail you out and make you whole,” Fugate says. Flood insurance is a bargain compared to windstorm protection, he says.
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Hardening By Degrees
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