More Floridians will get state money to harden homes. Does it lower insurance costs?
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State lawmakers this week poured another $180 million into a program to help 17,000 homeowners replace windows, doors, roofs and other parts of homes.
The My Safe Florida Home program, which offers up to $10,000 to help Floridians harden their homes, is intended to strengthen buildings against hurricanes and help reduce sky-high homeowners insurance premiums.
But the state doesn’t know how effective the program is at curtailing insurance costs, and isn’t poised to find out. Florida lawmakers approved the funding without requesting any data collection or studies.
To longtime observers, the decision was another sign of the Legislature’s apparent unwillingness to study the state’s insurance crisis, which lawmakers in both parties say has become their top constituent issue. Lawmakers have not produced any studies about it. Their primary response has been to make it harder to sue insurance companies, but they produced no proof that lawsuits are the main driver behind rising premiums and failing companies.
In September, Sen. Jason Pizzo, D-Hollywood, told the state’s insurance commissioner that more information has been released on UFOs than Florida’s insurance industry. On Wednesday, Pizzo asked how the state was evaluating the My Safe Florida Home program.
“How are we collecting data to gauge its efficacy?” Sen. Pizzo asked on the Senate floor on Wednesday.
“To be perfectly honest with you Sen. Pizzo, I’m not aware at the moment,” the bill sponsor, Sen. Corey Simon, R-Tallahassee, responded.
Some homeowners see meaningful savings
Since launching last year, the My Safe Florida Home program has been popular. It pays for free home inspections and, if eligible, the state will pay $2 for every $1 the homeowner spends on upgrades, up to $10,000. Applicants who are deemed low-income can receive funds without having to make matching payments.
Insurers are required by state law to issue discounts for completed upgrades. The discounts take effect when the policy renews.
As of Oct. 6, the state had approved 79,119 inspections and 20,890 grants. The money allocated this week was for people who applied before Oct. 15 and had not yet gotten funding.
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Early indications are that some recipients are saving money on their premiums. Chief Financial Officer Jimmy Patronis, who oversees the program, told lawmakers that the average homeowners insurance savings was just over $1,000, a figure that was repeated by some lawmakers this week.
That would be meaningful relief for many Floridians, where the statewide average annual premium is around $6,000, the highest in the nation, according to the industry-backed Insurance Information Institute.
But the $1,000 figure does not accurately reflect the average recipient’s experience.
The figure is based on about 1,600 recipients who self-reported their savings to Patronis’ office, according to data given to the Times/Herald by the office. Their reported savings ranged from 7 cents to $31,644, for an average of $1,001.17 per year.
The median average — which neutralizes the effect of outliers in the data — shows a much more modest discount of $577.
Even $577 is not an accurate reflection of the homeowner’s experience, because it does not capture homeowners who saw no savings or saw their premiums go up.
In a briefing to a Senate committee last month, a Department of Financial Services official said that while 1,325 recipients saw their premiums go down, 644 saw no difference and 341 saw their rates go up. Another 101 recipients didn’t report any information.
“This doesn’t mean the program wasn’t helpful,” the department’s chief business officer, Steven Fielder, told senators. Premiums that went up might not have gone up as much without the program’s discounts, he said. The department doesn’t currently track that information.
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The program is valuable in another crucial way, however: Homeowners could save thousands of dollars in repairs when a storm hits, said Mark Friedlander, spokesperson for the Insurance Information Institute.
It might not be the solution to reducing rates, which rose 42% on average this year, he said.
“A discount is good. That’s valuable to the homeowner,” he said. “But it does not make up for an average 102% cumulative premium increase over the last three years.”
Other states study programs
Several other coastal states have similar home-hardening programs and perform studies on the programs’ effects.
North Carolina launched a program in 2019 offering homeowners $6,000 to fortify their roofs. The state is partnering with multiple universities to analyze data the state is collecting on the program.
Since 2016, Alabama has offered homeowners $10,000 to fortify their homes, and the program has been studied by the University of Alabama.
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Florida in 2009 hired consultants to study the effectiveness of a previous version of the My Safe Florida Home program. The study found that for every $1 invested in home-hardening, $1.50 in hurricane risk was reduced.
State lawmakers have not committed to continuing the program beyond this year, but leaders have voiced support.
“I believe in the program, I believe we should look at ways to expand it,” said House Speaker Paul Renner, R-Palm Coast.
When asked why the state wasn’t collecting more data about the program, he said lawmakers could look for that in the regular legislative session, which begins in January.
Former state Sen. Jeff Brandes, R-St. Petersburg, has been frustrated by the lack of data and ideas to fix the property insurance crisis. He launched the Florida Policy Project, a think tank, this year to come up with best practice solutions to insurance and issues including housing and criminal justice reform.
The lack of good data on the home hardening program is emblematic of the larger problem with the Legislature’s approach to the crisis, he said.
“It highlights: What work was done over the summer on property insurance? And it seems to me, nothing,” he said.
Brandes questioned how useful the My Safe Florida Home program could really be, in part because the state could never afford to harden the millions of eligible homes in the state.
“There’s been no deep dive into whether it works or not,” Brandes said. “They don’t care. It’s just good politics.”
Miami Herald staff writer Alex Harris contributed to this report.
