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Applied Research Associates, Intrarisk Division, 8537 Six Forks Road, Suite 600,
Raleigh, NC 27615-2963; PH (919) 582-3400; FAX (919) 582-3401; email:
jsciaudone@ara.com
Abstract
Lessons learned from building performance in Hurricane Andrew led to
immediate improvements in the South Florida Building Code in 1994 and the
eventual creation and adoption of the statewide Florida Building Code (FBC) in 2002.
Alongside these building code improvements, numerous public and private programs
to encourage wind resistant construction were also created. Concurrent with the
adoption of the FBC, Florida Statute 627.0629 required all property insurers in
Florida to recognize the wind resistive benefits of the FBC in their residential rate
filings by February 2003. In effect, this statute requires insurers to provide discounts
for homes that are built in accordance with the FBC, as well as to homes that were
built prior to the FBC with similar wind-resistive features. The creation and
implementation of this insurance incentive program has faced many challenges
including: determination of the appropriate discounts by feature or combination of
features, inspection protocols for documenting wind resistive features, dealing with
intentional and unintentional errors introduced in the inspection process, and ensuring
the actuarial soundness of the program. This paper discusses the evolution and current
state of the mandated insurance discount program in Florida, its basis in wind
engineering, and its implementation via wind mitigation inspections.
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While insurers
i
com
mplied with this law aand providedd discounts for visible
feattures like sttorm shutters, the discou
unts were nnot comprehhensive. Onee reason for
thiss was the lacck of researcch into how single familly homes perrform in hurrricanes and
how
w they shoulld be evaluaated to propeerly classifyy them in terrms of windd resistance.
Fig
gure 1 shows a timelinee that includ
des the majoor milestonees that havee led to the
currrent mandated insurancee discount prrogram in Fllorida.
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delayed in the 2001 and 2002 Florida Statutes to begin on February 28, 2003, one
year after the effective date of the Florida Building Code. Aside from the effective
date, the language added to Florida Statue 627.0629 in 2000 has persisted unchanged.
RCMP Inspections
One technical hurdle facing the original insurance discount requirements was
the rating method used for structures. At the time of Hurricane Andrew, structures
were rated using ISOs predominantly fire-based classes, such as masonry, semi-wind
resistive or superior frame. While capturing some of the differences in the
performance of the main structural system with respect to wind loads, these classes do
not address the key causes of wind damage and loss associated with the building
envelope and the buildings aerodynamics.
To fill this void, the Residential Construction Mitigation Program (RCMP)
initiated by the state of Florida in 1997 provided unique information on single-family
building construction features, mitigation options and costs for existing buildings, and
the expected mitigation loss reduction benefits. Detailed inspections were performed
for over 2,000 houses in selected coastal counties in Florida between 1998 and 2000
(Twisdale et al 1998). These pioneering wind mitigation inspections provided
necessary data to on which to base further research to quantify the insurance
incentives required by Florida Statute 627.0629 (2000).
FWUA Class Plan and Inspections
The Florida Windstorm Underwriting Association (FWUA), which would
later be incorporated into Citizens Property Insurance, developed a first generation
Class Plan in 1998-1999 to classify buildings by their wind risk characteristics rather
than the ISO fire-based characteristics (FWUA 2000). The FWUA Class Plan was
based on loss relativities developed from actuarial judgment and model calculations
similar to those used in the 2002 Loss Relativities Study. This first generation Class
Plan was used by FWUA from July 2000 until February 2003 when it was replaced
with a rating system based on OIR-03-001M.
2002 Loss Relativities Study
In 2001, the Florida Department of Community Affairs commissioned a study
to evaluate the effectiveness of various wind resistance features for single-family
homes. This study (ARA 2002) developed comprehensive sets of loss relativities for
homes built both before and after adoption of the 2001 Florida Building Code
(effective date March 1, 2002). This study involved modeling the Florida homes as
they are actually built at numerous locations around Florida using ARAs engineering
load and resistance based HurLoss methodology.
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for the discount. It also meant that homes that only had protection on their glazed
openings, but received the Hurricane opening protection rating, while technically
eligible for the credit, had a material misrepresentation on their UMVI form.
UMVI Version 02/10
In February 2010, OIR promulgated a revised version of the UMVI to address
the deficiencies of the initial form published in 2007. The changes on the 02/10
UMVI form (OIR 2010) included:
The enhancements addressed issues identified with initial version of the form
and made inspectors more accountable. However, revised language in the roof
covering section of the form made it unclear as to whether tile roofs could ever
qualify as being FBC compliant.
2008 Loss Relativities Study
In 2008, the OIR commissioned a new Residential Wind Loss Mitigation
Study that was performed by Applied Research Associates (ARA 2008). This study
focused on updating the original study from 2002 and to bring consider additional
wind resistive features of homes that research had shown to have an impact on
residential hurricane losses. New features considered included: number of stories,
roof cover material (tile versus shingle), roof slope, soffit construction, vinyl siding,
window and door water leakage, and FBC roof cover age. In addition, this study
reiterated and clarified the minimal condition requirements for each feature.
To date, OIR has not published any memorandum to insurers requiring or
recommending the results of this study. However, some insurers have recently
completed their own studies to incorporate selected features into their own unique
rate filings.
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The mandated hurricane insurance discounts in Florida have raised quite a few
questions and concerns from interested parties since their inception in 2000. A sample
of the responses to these concerns include:
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refeerenced in this
t
paper in
n one conveenient packaage. Details can be fouund in (OIR
200
09).
Re--inspections
y have a stakke in ensurinng that windd mitigation
Insurancce companiees obviously
insp
pections are completed in a correct and consisteent manner. However, a number off
facttors regardin
ng these inspections like the lack oof photo requuirements before 2010,
inco
onsistent baackground of
o inspectorss, and inconnsistencies oon the UMV
VI have led
man
ny insurers to begin ordering
o
re-iinspections of houses tthat they arre currently
receeiving discounts.
Citizenss Property Insurance
I
is in the midddle of an aaggressive eeffort to reinsp
pect all 400
0,000 homess they insuree that are reeceiving mittigation disccounts. The
pilo
ot phase of this program showed large error rates for seeveral featurres, but the
highest error rates were fo
or opening protection
p
((57%) and rroof-to-wall connection
(46
6%) (Citizens 2010). Fig
gure 2 show
ws the percenntage of hom
mes qualifyinng for each
classsification of
o opening protection
p
an
nd roof to w
wall connecction from tthe Citizens
pilo
ot re-inspection program
m.
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158,135
62%
6%
$602.21 (22.3%)
$95,230,525
Reporting of roof cover code by type of roof cover on the home, allowing
for multiple roof cover types to be identified and each can be classified as
to whether it meets the requirements of the FBC;
Incorporation of minimal condition requirements for roof deck attachment
and roof to wall attachment;
Clarification of the number of nails required on either side of a wrap-style
roof to wall connector; and
Inclusion of an opening protection level chart to make the classification of
opening protection as clear and objective as possible.
These changes increase the objectivity of the inspection form and reduce the
likelihood that inspectors make mistakes related to interpretation of the classification
of wind resistive features whether unintentional or intentional.
Taking Advantage of Technology
To improve inspection quality, many inspection companies are taking
advantage of the latest technology in smart phones, tablet computers, and the internet
to minimize mistakes and improve consistency of inspection results. For example,
ARA has developed a fully integrated system that collects objective inspection data
via an iPhone application, and transmits all data and photos in a single package to a
web-accessible database. Once uploaded, the website and database are used to
perform quality assurance reviews, create reports based on the data collected and
built-in decision tree logic, and deliver results. This technology supports improved
inspection quality by:
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alternative option is to allow for interpolation between the bounding cases of purely
hip and purely gable roof shapes.
Once appropriate features are identified, changes must be implemented
consistently and inspections must be performed consistently with the analyses
conducted to establish the discounts.
References
Applied Research Associates, Inc. (2002). Development of Loss Relativities for
Wind Resistive Features of Residential Structures, Florida Department of
Community Affairs, Tallahassee, Florida, March.
Applied Research Associates, Inc. (2008). 2008 Florida Residential Wind Loss
Mitigation Study, Florida Office of Insurance Regulation, Tallahassee,
Florida, October.
Citizens Property Insurance (2010). Citizens Property Insurance Corporation
Reinspection Pilot Study Preliminary Results as of 4/30/2010, report to the
Citizens Actuarial and Underwriting Committee, Jacksonville, FL, May.
Citizens Property Insurance (2012). Inspection Program Report, report to the
Citizens Actuarial and Underwriting Committee, Jacksonville, FL, March.
Fla. Stat. 627.0629, (1999 Statutes).
Fla. Stat. 627.0629, (2000 Statutes).
Fla. Stat. 627.0629, (2001 Statutes).
Fla. Stat. 627.0629, (2006 Statutes).
Florida Windstorm Underwriting Associates (2001), Manual of Rates, Rules, and
Procedures, Jacksonville, FL, July.
FCHLPM (2010), Windstorm Mitigation Discounts Report to the Governor, the
Cabinet, the President of the Senate, and the Speaker of the House of
Representatives, Florida Commission on Hurricane Loss Projection
Methodology, Tallahassee, February.
Office of Insurance Regulation (2003). Informational Memorandum OIR-03-001M;
Implementation of Revision to Section 627.0629(1), F.S. Concerning
Residential Property Insurance Rate Filings, Effective June 1, 2002, Florida
Office of Insurance Regulation, Tallahassee, January.
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