Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Editor’s note: The Florida Legislature’s 2023 regular session concluded May 5, but people in the property insurance industry continue to offer ideas for the state’s distressed market. Here’s one from independent adjuster Ben Mandell.

I am an independent insurance adjuster. That means that I work for many different insurance companies on a freelance basis. I am usually hired by an IA firm that has a contract with an insurance company to adjust insurance claims. Many insurance companies have a limited number of staff adjusters and have more claims than their internal adjusters can handle. That’s why I have a job.

I am a field adjuster, which means that I travel to the actual location of the claim. My job is to meet with the policyholder, gather the facts of the loss and document the damages. I take a lot of photos so that the managers and desk adjusters can see the damages and make the proper payment, to the policyholder, for the loss.

As a field adjuster that has handled thousands of claims, I’ve seen some of the same things come up over and over again. There is no question that the strengthened building codes in Florida have helped reduce the damages from catastrophic events. That is a step in the right direction, but it has created other problems. Claims have gotten more complex and what were once easy claims became more difficult to adjust as the damages are not as easily visible. For example, with the new building codes, shingles are not detaching from roofs as easily and as often as in the past.

We may arrive at a home and notice than most of the shingles are still attached to the house. Some folks believe if the shingles are still on the roof, then there is no damage. After all, you don’t see any damage. But upon closer inspection, we will often find wind damage to many shingles.

During a hurricane or tornado, the winds will pick up pieces of wood, trees or other debris and crash these into the roof at speeds of 150 mph or more. On an asphalt shingle roof, the shingle is still there, but it is dented; granules have been loosened and the internal fiberglass matting has been broken. If it’s not leaking today, it will leak within 3 to 6 months as the sun heats the roof up in the daytime and cools it down at night. This will cause the shingle to crack or open up, which results in the roof leaking, even though the shingle is still on the roof.

The most common property insurance claims are from roofs and from water. These two categories represent 70% of our claims volume. The water we refer to is water from broken pipes within the dwelling, broken or faulty appliances (i.e., dishwashers, refrigerators) within the dwelling, or water that enters the dwelling though a broken window, leaking roof, or from above.

Most insurance companies do not include or have coverage for water that touched the ground before entering the dwelling. We classify this as flood water and this peril is excluded from dwelling or commercial insurance policies. This is an important exclusion. Flood insurance is a separate insurance product that must be purchased separately and is mostly a government-backed insurance product issued though the National Flood Insurance Program.

One of the first things we learn in claims adjuster training school is that the dwelling policies used in the insurance industry are fire policies. The insurance was originally designed to cover only losses from fire. The fire policy is modified though the use of endorsements which can add or take away additional coverages.

There are many types of available endorsements. Some of the most recent common endorsements are for mold and water. Most dwelling policies now limit mold damage to $5,000 per policy. A water endorsement limit might be a maximum of $10,000 per policy. An endorsement may exclude sewer backup unless you pay an additional premium.

These endorsements are important for insurance companies to limit their maximum exposure and keep the premiums at an affordable level.

Prior to introduction of a mold endorsement of $5,000, most insurance companies were responsible for coverage up to policy limits. This caused lawsuits demanding that an entire house be demolished and rebuilt because someone found mold within the dwelling. These claims may, or may not, have had merit. The simple fact remains that they were expensive claims to investigate and/or defend.

We no longer see these types of major claims. The reason is that the maximum payout is $5,000. The target has been taken off the insurance policy and the bad guys can’t come in and scare a homeowner half to death claiming hundreds of thousands of dollars in damages when the maximum payout is limited to $5,000. The payoff is not worthwhile for the bad guys.

There is one glaring endorsement that is missing. That is a roof endorsement. As a field adjuster, I have recommended this endorsement for the past several years. It’s really just common sense. Thus far, I’ve gotten no traction with it and every excuse why the insurance companies won’t do it. I hope that will change soon.

It is my belief that the insurance crises we are currently facing in Florida could have been eliminated, or greatly minimized, with a roof endorsement attached to insurance policies. They have the endorsements in Canada, so it’s not totally unheard of. Why won’t the Florida insurance companies support a roof endorsement?

My belief is that a Florida policy should contain a roof endorsement that provides for a maximum amount of coverage. As an example, the Roof Endorsement coverage could be $20,000. That would be the maximum a policyholder could receive if their roof were damaged. If the policyholder wants more coverage, then they could purchase more roof coverage for an additional premium. If the policyholder needs $30,000 of protection, then they could purchase an extra $10,000 worth of coverage for the roof.

The insurance company may determine, during the initial underwriting inspection, that the roof is old, but not leaking, and is still serviceable. Rather than decline the policy or require a new roof before a policy is issued, the insurance company may choose to limit the initial amount of the coverage under a roof endorsement. For example they may limit the roof coverage to $5,000.

The endorsement would limit the maximum amount that the insurance company would have to pay out on a roof claim. Currently there is no limit on roofs in Florida and the policy limits are an attractive target for the bad guys. Without a roof endorsement, if a home has a $400,000 policy, then the bad guys look at that number and can take a $20,000 roof claim and turn it into a $120,000 payout from the insurance company. If there were a roof endorsement then that $20,000 roof would be replaced and the bad guys will have to figure out another way to take advantage of the system.

Let’s hope we can find some Florida insurance executives that understand what a roof endorsement could do for this industry. Surely this one-page policy addition could be written and implemented faster than the Florida Legislature passed the 120-page insurance bill last December.

Ben Mandell is an independent insurance adjuster, licensed in Florida and other states.

Advertisement