Proposed New Senate Bill Filed: Policyholders Lose Prompt Replacement Cost Payments and Older Roof Insurance Coverage
If you are a policyholder, don’t expect prompt payment of replacement cost benefits and payments for damage to older roofs if Florida Senate proposed legislation passes. A proposed bill filed as a substitute that will be heard in the Florida Senate and Banking & Insurance this Wednesday was just released this afternoon. I have not had an opportunity to review it in detail, but a number of anti-consumer provisions are contained within this proposed legislation.
The Florida Senate’s proposed law allows homeowner policies that will not pay the cost to fully repair a damaged roof older than 20 years. This will cause significant hardship to retirees and just about everybody else who is not wealthy. If your 21 year old roof gets destroyed in a fire and you have this new policy, you may get paid only a small amount of money to replace it. This is a significant shift in the historic manner of how insurance works. Insurance typically insures the entire structure and provides sufficient money to repair or replace that structure from an insured event.
Homeowners, especially those on fixed budgets, will suffer even if the roof is perfectly fine. The proposed law takes away provisions that passed just recently requiring the immediate payment of replacement cost for real and personal property. A few insurance companies pay replacement cost right away under their contracts. This proposed law takes away the requirement of prompt payment and allows insurers to hold back benefits until the replacement is made and a construction contract or a receipt is produced. Chances are that claims payments will be delayed, and we will have the same problems we did before laws were passed outlawing the delays associated with replacement cost payments.
More later….
Isn't the premise of indemnity to return to pre-loss condition, not a lottery where a 20 year ill maintained roof gets replaced? Isn't a 20 year roof nearing the end of it's life expectancy especially in hurricane prone Florida?
Furthermore we see way to many instances where the insured has recieved replacement value and never replaced. Silly provisions such as if the roof is damaged to more than 25%, it needs full replacement are the reason Florida's insurance marklet is in such a mess anyway.
If insurance was utilized as it should and was intended these conundrums would not exist.
Chip:
quoting:
"If you are a policyholder, don’t expect
prompt payment of replacement cost
benefits and payments for damage to older roofs.."
Personally, it's been my experience that "prompt pymts." aren't/weren't made long b4 this proposed Bill hit the Fla. Senate.
What a joke, but, as usual, it's obvious who suffers in this scenario....the "average" American citizen struggling to support themselves and/or their family. Always the little guy/gal - nothing new there.
That will never change because if it did who would the wealthy have to give the shaft to? Nobody!
SHIRLEY HEFLIN
To: Insurance Vet
If the policy is written on an actual cash value basis, then your premise would be applicable. However, when a policy is written on a replacement cost basis, a polciyholder should get paid for a new roof even when the old roof had reached the end of its life expectancy.
I see nothing wrong with that in light of the fact that the policyholder is paying the insurer a premium for that extra coverage. What stinks is when the insurer underwrites a risk and collects a premium based on replacement cost coverage, but balks at paying the RCV loss using the same arguments that you make in your post.
This is a classic case of the gov. representatives looking out for the best interests of a business entity, and not the best interests of the living breathing human entity. Government is supposed to serve humans,not businesses, and corporations.