By: Maria Mallory White
A Broward County home was featured Wednesday in Florida Insurance Consumer Advocate Robin Westcott's presentation before the Senate Banking and Insurance Committee.
Using the ranch-style, $165,000 home as an example of the average dwelling covered by Citizens Property Insurance Corp. in the counties of its highest risk to wind damage—Broward, Palm Beach and Miami-Dade—Westcott called for lawmakers to focus on helping consumers keep roofs on their homes as a viable defense against the looming losses Floridians would be assessed if a Sandy-size storm hit the Sunshine State.
As the state's largest property insurance carrier, Florida law requires taxpayers cover any shortfall at state-backed Citizens.
The Broward home illustrated the striking difference between the market value of the average home in Citizens' coastal portfolio and the cost to rebuild. While the market value has held steady over the years, the cost to replace the home could run total nearly double that figure.
"We're not talking about $1million, $2 million homes on the coast," said Westcott. "Many times there's a very unfair characterization that we are supporting very wealthy people on the beach."
The so-called "mitigation" approach described by Westcott, could leverage Citizens' $300 million in reserves to fund defensive approaches, such as shutters and new, custom-fitted canvas technologies. For about $2,000 to $3,000 for a home similar to the Broward example, research shows such enhancements would prevent the high winds that enter homes through doors, windows and over openings, making them far less susceptible to losing their roofs, Westcott said.
"We all keep talking about premiums. We all keep talking about rates and the affect [of risk] on rates, but we're only treating symptoms. The problem is exposure to a castrophe by a hurricane," Westcott said.