Roof's age, not cost to repair, could be standard for insurance payouts under proposed law

TAMPA, Fla. - A little hail damage here, a little hail damage there, and suddenly Edgar Ortiz of Orlando was in need of a new roof -- to the tune of $25,000.

"We went through the whole hurricane season not knowing whether our roof would be strong enough to manage," he said.

He thought his insurance would cover it, but they only offered $5,000. It took a year - and a lawyer - for Ortiz to get his roof paid for by insurance.

"The minimal expectation is that when you file a claim, you will be taken care of," he said.

Lawyer Chip Merlin of Tampa says there will be more Floridians in Edgar's shoes if the state House joins the Senate in passing its insurance reform bill. 

While one provision still requires full replacement of roofs under 10 years old, for older roofs, it also allows companies to charge less for premiums, but cover less when the roof is damaged, based on what the roof is currently worth.

"People think that they are getting a great deal from an insurance agent when what they are really getting is a policy that is not fully insuring them for the full coverage they want to have when the catastrophe happens," said Merlin.

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However, lawmakers say they are trying to prevent insurers from giving up on Florida altogether after the state claimed $1.5 billion in losses last year. 

Most insurance companies are asking for increases of at least 10% on premiums this year. 

The bill's sponsor, Jeff Brandes (R-St. Petersburg) says the law gives homeowners the ability to buy a policy that fits their budget.

"If they want to buy full roof coverage, they should be able to buy that," said Brandes. "If they want to buy actual cost, or cash value or stated value, they should be able to buy that."

Merlin insists it's a better fit for insurers' piggybanks. He wants the Florida House to approve a proposal that allows the state to audit insurers.

"To really make it transparent about how much money the owners of the Florida insurance companies are making, especially during the 10 years we never had a hurricane at all," Merlin said.

The Florida House Committee on Commerce will be discussing a version of the bill Friday morning.