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.