Regarding the article “New Property Insurance Rules Approved” appearing in the May 31 edition of the Naples Daily News, it appears the Legislature has tried putting a Band-Aid on a gaping wound. The two biggest things they could have done is to do away with allowing the consumer to turn their claim over to roofing and other contractors and do away with or modify the replacement cost provision currently a part of today’s homeowner policies.
As a retired independent insurance agent, whose former business was domiciled in Virginia, my clients had to first secure several repair estimates. If there was any disagreement, the insurance company would get their own estimate. If neither could agree on the repair costs the consumer could hire an attorney or submit the claim to arbitration.
Secondly, why in the world should an insurance company agree to insure a roof or any asset that depreciates over time for “replacement” cost? The average life of a roof may be 20-23 years. Windstorm damage is quite likely to occur with an aging roof. If there is no damage over time the homeowner would have to replace the roof at his own expense. So why would an insurance company give the homeowner new for old because he lost shingles due to a windstorm?
It has been suggested that homeowners be given the choice of actual cash value (ACV) or replacement cost coverage. ACV is defined as replacement cost less depreciation. If you choose ACV, there should be a significant reduction in the premium for windstorm coverage.
Gray Poehler, Naples