Effects of Wind Mitigation Credits on Florida Home Insurance Market

Florida suffered hurricanes for many years which cause the destruction of lives and properties of the people. The people and property of Florida are extremely susceptible to hurricane risk.  Because of more hurricanes, the people of Florida hardened the infrastructure and buildings to be able to withstand the damage a hurricane may give on its populations and building stock.

The government of Florida issued an insurance policy called Windstorm Mitigation Credits. The adopted provisions for a new Florida building code take effect on March 1, 2002.This insurance policy provides insurance discounts for those homes which has good structures installed with wind-resisting features. The insurance company conducts Wind Mitigation Inspections in every house, once that house passed all the requirements then a certificate will be issued. The homeowner will enjoy the benefits and discounts.

Although in last 2009 there was no occurrence of hurricanes or significant tropical storms, yet over 100 Florida residential property insurers reported losses. The Office of Insurance Regulations reported that out of 215 insurance companies there are 102 of it reported looses in the second quarter of 2009. Though there are underwriting losses even without hurricane event, this gives an alarm to insurance companies, regulatory agencies, and citizens of the state, about the ability of Florida’s insurance market to pay claims which could leave many householders unprotected.

Many industries criticized the Mitigation credits in Florida. There are many issues came such as the insurers believed of miscalculations of credit and also some allegation of the fraud in building inspectors. Stakeholders believe that the Wind Mitigation Credits are partially responsible for the present event and could be a driving factor. Furthermore, the insurance companies are stirring up windstorm mitigation credit re-inspection programs to verify the validity of granted mitigation credits.

As of now the Wind Mitigation Credit still continue to give benefits to the people of Florida. In order for this program to exist amidst the losses of some insurance company, every citizen must be responsible enough because they are the one who benefited this program. The security of their families are depends on it. If there are any problems against the insurance company the government requested to report immediately.