Florida Judge Invalidates Windstorm Credit Forms; Regulator Appeals

A Florida administrative law judge has ruled that some forms used by insurers to determine a homeowner’s windstorm premium credits are invalid because they don’t take into account measures taken to protect existing homes and arbitrarily exclude steps taken to reinforce garage doors, windows and other openings.

The Florida Office of Insurance Regulation (OIR) has already filed an appeal with the Florida First District Court of Appeal seeking to overturn the ruling that was issued last month in the case of Secure Enterprises v. Office of Insurance Regulation and Financial Services Commission, DOAH 12-1944RX].

It could be months before a final decision on the OIR’s appeal over the policy forms is made. Until then regulators said they would apply the forms and discounts as currently written.

The case was brought forward by the Plantation, Fla.-based Secure Enterprises, which since the mid-1990s has marketed a bracing system that is designed to reinforce the ability of existing residential garage doors to withstand wind speed and wind-borne debris.

Sold in Lowe’s locations throughout the state, the bracing system meets the requirements of the 2010 Florida Building Code. However, under the current approved policy forms, homeowners installing the bracing system are not eligible for a mitigation premium credit.

Jack Stumpff, Secure Enterprises president and part-owner, said the company filed the suit after repeated attempts to convince regulators to change the forms, which by statute are required to include premium discounts for construction methods and other techniques that meet a statewide building code.

“The OIR, in my view, is in violation of the statute instead of supporting the statute as it is supposed to,” said Stumpff.

At issue are two forms used by insurers to calculate premium credits based on the ability of the homes to withstand any potential damage from a hurricane. The forms refer to two types of protection, including one that improves the ability of doors, windows and other opens to withstand wind resistivity or wind speed. The other refers to the ability of the openings to withstand impact resistivity or wind-debris borne objects that might strike a home during a hurricane.

Form 1655 specifically addresses the ability of a home to withstand wind-borne debris. The form refers to shutters, but omits any reference to methods taken to reinforce other openings such as garage doors and skylights despite the fact that protecting those openings are referred to in state law.

Administrative Law Judge Robert Meale ruled the form is invalid since although it implicitly includes steps taken to improve the ability of garage doors, skylights and other openings to withstand wind-borne debris it “misleads homeowners by suggesting that the only form of opening protection eligible for a discount is shutters.”

Meale also ruled that another form, number 1699, is invalid when applied to existing construction since it does not include discounts for steps that reinforce windows and doors against high wind speed. Likewise, it provides no discounts for the ability of garage doors to withstand damage from wind-borne debris.

Stumpff said it makes no sense that the form does not apply to reinforce impact-resistant garage doors, which he said have a propensity to being blown out by interior wind pressure once they are breached by an object.

“In theory, little holes become big openings,” said Stumpff.

Meale noted that in fact, the ambiguity in form 1699 could work against its intent, which is to incentivize homeowners to strengthen their homes against wind and wind-debris damage.

“Form 1699’s inclusion of discounts for protecting windows from wind-borne debris, but not wind, and exclusion of discounts for any protection of doors provides homeowners with incentives to partially protect their windows and no incentives to protect their doors,” wrote Meale.