PROPERTY INSURANCE AND HURRICANE PREPAREDNESS
CS/HB 7057 — Hurricane Damage Mitigation
by Policy and Budget Council; Jobs and Entrepreneurship Council; and Rep. Traviesa and others
(CS/CS/SB 1864 by Community Affairs Committee; Banking and Insurance Committee; and
Senators Posey and Crist)

During the 2006 Regular Session, the Legislature created the Florida Comprehensive Hurricane Damage Mitigation Program and appropriated $250 million to provide financial incentives to encourage residential property owners in Florida to retrofit their properties, making them less vulnerable to hurricane damage and helping decrease the cost of residential property and casualty insurance. The program provides free home inspections and matching grants of up to $5,000 for home mitigation and is administered by the Department of Financial Services (DFS). The bill makes changes to the program and the Florida Building Code, and contains other issues related to hurricane damage mitigation.

My Safe Florida Home Program [s. 215.5586, F.S.]

• The name of the program is changed from the Florida Comprehensive Hurricane Damage Mitigation Program to the My Safe Florida Home Program (MSFH).

• Legislative intent is provided that the MSFH program provide at least 400,000 inspections and at least 35,000 grants by June 30, 2009.

• The bill clarifies that free home inspections are available statewide, but limits the inspections to site-built, single-family residential property.

• The amount of matching grants (and non-matching grants for low-income homeowners) are maintained at a maximum of $5,000, but grants are limited as follows:

   o Grants may only be used for opening protections (such as shutters); exterior doors, and to brace gable ends (and are no longer available for roof upgrades). The DFS may require that all openings be protected as a condition of approving a grant, under certain conditions.

   o The property must be homestead property with an insured value of $300,000 or less (rather than $500,000), located in the “wind-borne debris region,” and built prior to March 1, 2002. The “wind-borne debris” region is the where the Florida Building Code requires new homes to have opening protections (shutters, etc.) and is where sustained winds of 120 mph or greater are likely to occur.

• The DFS must establish objective, reasonable criteria for prioritizing grant applications.

• The bill allows hurricane mitigation inspector training to be on line or in person and allows a hurricane mitigation inspector to also be the mitigation contractor if the inspector is otherwise qualified and certified. The bill requires that an application for an inspection must contain a signed or electronically verified statement made under penalty of perjury that the applicant has submitted only a single application for that home.

• The DFS is authorized to contract with third parties for grants management, inspection services, educational outreach, and auditing services. Contracts valued at $500,000 or more shall be subject to review and approval by the Legislative Budget Commission.

• DFS shall transfer $40 million from funds appropriated to the MSFH program, including up to 5 percent for administrative costs, to Volunteer Florida Foundation, Inc. (VFF), for provision of inspections and grants to low-income homeowners. VFF must report its activities and account for state funds on a quarterly and annual basis.

• In making matching fund grants available to local governments and nonprofit entities for projects that will reduce hurricane damage to single-family residential property, the DFS must liberally construe such requirements in favor of availing the state of the opportunity to leverage program funding with other sources of funding.

• The DFS may use up to $10 million from the funds appropriated for the MSFH to develop a no interest loan program by December 31, 2007, to encourage the private ector to provide loans for mitigation measures. The DFS shall pay the interest on the loans which may be for a term of up to 3 years and cover up to $5,000 in mitigation measures.

• The DFS is directed to make an annual report by February 1 of each year on the activities of the program that shall account for the use of state funds.

• The DFS must transfer $1 million from the funds appropriated to the MSFH program to the Low-income Emergency Home Repair Program. Administrative expenses may not exceed 5 percent ($50,000) of the funds appropriated.
Florida Building Code: Roof Replacements and Adding Opening Protections [s. 553.844, F.S.]

The bill requires the Florida Building Commission to develop and adopt within the Florida Building Code standards for mitigation techniques for site-built, single-family-residential structures constructed prior to the implementation of the Florida Building Code, including gableend bracing, secondary water barriers for roofs, roof-to-wall connections, roof-decking attachments, and opening protections.

The Florida Building Commission must adopt rules by October 1, 2007, to take immediate effect (to apply to building permits applied for on or after that date) to require that a roof replacement incorporate a secondary water barrier and strengthening the roof decking attachments.  For single-family residential structures located in the wind-borne debris region that have an insured value of $300,000 or more, a roof replacement must also incorporate cost-effective improvements of roof-to-wall connections as determined by the Florida Building Commission, under the standard that such improvements add no more than 15 percent to the cost of the reroofing. These rules shall be incorporated into the next edition of the Florida Building Code.

Any construction activity that requires a building permit after July 1 2008, and for which the estimated cost is $50,000 or more must include opening protections (shutters, etc.) as required for new buildings if the building has an insured value of $750,000 or more and is located in the wind-borne debris region.

Eligibility for Coverage in Citizens Property Insurance Corporation [s. 627.351(6), F.S.]

Effective January 1, 2009, a home (personal lines residential structure) with an insured value of $750,000 or more that is located in the wind-borne debris region is not eligible for coverage from Citizens Property Insurance Corporation unless it has opening protections as required for  new construction. A home complies with this requirement if it has opening protections on all openings and complied with the Florida Building Code at the time they were installed.
Contractor Continuing Education [s. 489.115, F.S.]

The bill adds, for applicable licensure categories, wind mitigation methodologies to contractor continuing education requirements.

Wind-loss Mitigation Study

The bill provides that it is the intent of the Legislature that scientifically valid and actuarially sound windstorm mitigation rate factors, premium discounts, and differentials be provided to residential and commercial property insurance policyholders. In order to ensure the validity of such factors, the Office of Insurance Regulation, in consultation with the Department of Community Affairs and the Florida Building Commission, is directed to conduct one or more wind-loss mitigation studies for both residential property (including mobile homes and condominiums) and commercial non-residential property. The studies related to residential property shall be completed by January 1, 2008 and the studies related to commercial nonresidential property shall be completed by March 1, 2008.

The General Appropriations Act contains an appropriation of $1.5 million to the Office of Insurance Regulation to conduct these studies.

Approved by the governor and took effect upon becoming law.