By Jim McCarthy and Alex Rickert
Local officials, property owners and condominium associations had the rare chance to hear from and speak with Citizens Property Insurance leadership regarding coverage issues on Aug. 25.
Organized by Fair Insurance Rates for Monroe, or FIRM, the town-hall-style meeting at the Marathon Government Center was broken down into two gatherings – a morning session for local government officials and an afternoon session for the public to air their concerns.
In both sessions, Citizens leadership gave a lengthy presentation about nonrenewals condominium associations were receiving from the company due to the state of their roofs, and specifically the difference between structural compliance and insurability. Jay Adams, Citizens Property Insurance chief insurance officer, said the idea for the town hall originated from a conversation he had with Mel Montagne, FIRM president, on policy nonrenewals. Adams said one local condominium association recently saw coverage for five of their eight buildings non-renewed by Citizens due to roof conditions.
“The real takeaway here is: ‘legally compliant’ does not automatically mean that a building is insurable,” Adams said.
The 2021 Surfside condo collapse led the Florida Legislature to create stricter statewide requirements, and that meant condominium associations would face new regulatory compliance with a milestone inspection and a structural integrity reserve study (SIRS). Adams said the milestone inspection is focused more on safety and structural condition, but does not determine the remaining useful life of a roof. That’s addressed in the SIRS report, which specifically mandates inspectors to produce a remaining useful life of the components they review.
“It really requires the inspector to evaluate the roof, state its estimated remaining useful life, determine the replacement cost and then provide a funding formula to save for that roof replacement,” Adams said. “This is a long-term financial planning tool.”
From an underwriting perspective, Adams said they’re not only looking at the roof’s age, but also how resistant the roof is to losses. He said Citizens Property Insurance has some of the most lenient lifespans for roof coverings of any carrier in the state.
“When we talk about a flat roof, you could have a built-up, three-ply, tar-and-gravel modified bitumen membrane type roof. The eligibility standard for that is 15 years. If you’re in year 15, we need to be thinking about replacing the roof because now we’re at the end of our standards,” Adams said.
Adams also pointed out that a roof treated with new coatings won’t change the underlying age of the roof system.
“You can’t take a 15-year roof, put some coating on it and make it a one-year roof,” he said. “It doesn’t require a permit and it doesn’t resolve issues that we may or may not even know exist. There could be wet insulation, deteriorated fasteners.”
Montagne said some companies tout their roof coatings as “acceptable to Citizens.” Montagne wondered if Citizens leadership was going after those companies to end the false advertising. Steven Mostella, Citizens vice president of underwriting, said they’re aware of South Florida companies engaging in this practice, and that Citizens’ legal team is working on the matter.
Adams ended by urging condominium associations facing nonrenewals to work with Citizens to get into compliance.
Heightened frustrations spilled over in the afternoon session open to the public, in which condo association leaders and building owners confronted staff over inspections and roof life timelines they said were inconsistent, punitive and in some cases, fabricated.
Citizens leaders again worked to clarify the differences between state-mandated inspections and reserve studies and insurers’ own underwriting standards and evaluations of expected roof life. But attendees said the discrepancies became little more than a costly guessing game at times, slapping associations with massive bills on short timelines based on inspection results they heavily disputed.
One board member said his association waited “many months” for an inspection report – only to learn that his building would need a roof replacement in less than two months during hurricane season to preserve coverage.
“If you have a good reserve study with an engineering professional who knows the property, and they’re giving 10 years for a community to plan financially, those two (the engineer and the insurer’s timeline) should be very close,” said another speaker. “Now you’re saying ‘We’ll give you one year for what the community has only assessed over 10 years.’ Those are huge different ball games to play and act like they don’t matter.”
“If you’re doing financial planning to replace the roof, it’s got to be based on what’s going to count,” added Key Colony Beach condo owner Fred Swanson. “If (Citizens) has a tighter plan, that’s what we need to know. Don’t keep it to yourself – tell me now, 15 years ahead. Anything else is just dumb.”
Some of the sharpest comments came from the president of Key West’s Coconut Mallory Resort condominiums, a casualty of recent nonrenewals.
“(An inspector) is saying that we need a new roof on a building that we had a complete new roof put on five years ago, with a 20-year warranty, all new metal, all new underlayment,” he said. “He’s got a note that says we have cracks in our parking lots – our parking lot is brick pavers, and he took a picture of it.
“Where do you pick these guys? Are you giving them a kickback for getting people canceled, and can we challenge the inspector?”
The forum, which was broadcast on Monroe County Television, was also recorded for future viewing on FIRM’s website and YouTube.
