OLR Research Report

August 17, 2006




By: Janet L. Kaminski, Associate Legislative Attorney

You asked for a summary of Florida's hurricane windstorm insurance requirements.


Florida law requires property insurance policies to include coverage for damage caused by wind during a storm that the National Hurricane Center declares to be a hurricane. Policyholders are eligible for premium discounts for installing certain wind resistant features on their homes. Policies may include a separate deductible applicable specifically to damage caused by a hurricane. The Florida Office of Insurance Regulation may order an insurer that wants to cancel or not renew a policy to wait until 90 days after any hurricane damage to the insured property has been repaired. If a cancellation was to take effect during a hurricane, the effective date must be postponed until the hurricane ends.

The Florida legislature created a state run insurance safety net, Citizens Property Insurance Corporation, to provide insurance to homeowners who cannot find insurance in the private market. Citizens is currently Florida's largest property insurer, covering 1.2 million policyholders. The legislature also created a state administered reinsurance program (a reinsurer insures insurance companies) called the Florida Hurricane Catastrophe Fund to provide a stable and ongoing source of reimbursement to insurers for a portion of their catastrophic hurricane losses.

The Florida Hurricane Damage Mitigation Program, which passed in 2006 (SB 1980), offers free home inspections to eligible homeowners to identify ways to strengthen their homes against hurricane damage risk. It also offers grants toward retrofitting existing property with mitigation improvements.

The legislature created the Task Force on Long-Term Solutions for Florida's Hurricane Insurance Market in 2005 following the severe 2004 hurricane season. This was followed by another severe season in 2005. The task force is charged with making recommendations to the legislative and executive branches on keeping sufficient capacity in the property insurance market (private and public) to ensure continued availability of insurance coverage for hurricane losses.


Hurricane Windstorm Coverage

Florida law requires insurers issuing residential property insurance policies to include hurricane windstorm coverage in the policies (Fla. Stat. Ann. 627.0629(6)). Residential policies includes both personal lines (i.e., coverage provided by homeowner's, mobile home owner's, dwelling, tenant's, condominium unit owner's, cooperative unit owner's, and similar policies) and commercial lines (i.e., coverage provided by condominium association, cooperative association, apartment building, and similar policies, including policies covering the common elements of a homeowners' association) (Fla. Stat. Ann. 627.4025(1)).

“Hurricane coverage” is coverage for loss or damage caused by windstorm during a hurricane. It includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or dust enters and causes damage (Fla. Stat. Ann. 627.4025(2)(a)).

“Windstorm” means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane that results in direct physical loss or damage to property. “Hurricane” means a storm system that has been declared to be a hurricane by the National Weather Service's National Hurricane Center. A hurricane includes the time period (1) beginning when the National Hurricane Center issues a hurricane watch or warning for any part of Florida, (2) continuing for the time period during which the hurricane conditions exist anywhere in

Florida, and (3) ending 72 hours after the National Hurricane Center terminates the last hurricane watch or warning issued for any part of Florida (Fla. Stat. Ann. 627.4025(2)(b) and (c)).

Hurricane Windstorm Insurance Discounts

A Florida law effective June 1, 2002 requires insurance companies to provide discounts on the hurricane windstorm portion of insurance premiums for residents who install wind resistant features on their homes (Fla. Stat. Ann. 627.0629). However, few homeowners were aware of the requirement and have not received the discounts. As a result, the legislature passed and the governor signed into law Senate Bill 1486, effective October 1, 2005. It requires insurers to notify insurance applicants and policyholders of the premium discounts available for installation of fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm. The Florida Office of Insurance Regulation developed the required notice form and must post on-line the discounts it has approved for each licensed insurer (Fla. Stat. Ann. 627.711).

Available discounts range up to 42% of the hurricane windstorm portion of insurance premiums. To qualify for discounts, insurers typically require a certified inspector to examine a home for the necessary wind resistant features. The homeowner pays the inspection cost, but often it is offset by the accrued premium savings. Discounts are offered for things such as hurricane shutters, impact rated glass, roof-to-wall connections, roof deck fastening, building code equivalent roof covering, and hip roof shape.

Hurricane Deductible

Property insurance policies may include a separate deductible specific for hurricane losses. Specific requirements apply by law (See, Fla. Stat. Ann. 627.701). The following information regarding Florida's hurricane deductible requirements is from the Insurance Information Institute's July 2006 publication Hurricane and Windstorm Deductibles available at

A hurricane deductible is a percentage of the insurance coverage on the dwelling or a dollar deductible higher than those for other causes of loss. By Florida law, the hurricane deductible provision is triggered by windstorm losses resulting from a storm system declared to be a hurricane by the National Hurricane Center. They remain in effect during the duration of the hurricane (from when the watch or warning is issued and continuing until 72 hours after its termination). Wind damage from storm systems other than declared hurricanes is not subject to the hurricane deductible but to the policy's general deductible.

Hurricane deductibles as shown in Table 1 and their triggers are set by law and are the same for the private market as well as Florida's Citizens Property Insurance Corporation (“Citizens”), the state-run program that provides homeowners insurance to consumers who can't find coverage in the private market. In addition to the deductibles shown in the table, Citizens offers a 10% optional hurricane deductible for its residential full coverage policies and its wind-only policies. The 10% optional deductible is also available for mobile homes and commercial residential apartments and townhouses. Citizens also provides for premium credits for homes that have approved roofing, wall, shutter, and glass modifications.

Hurricane deductibles for a mobile home property insurance policy may not exceed (1) 5% of the property value if the property is subject to any liens and (2) 10% of the property value if the property is not subject to any liens.

Homeowners pay the deductible only once during a hurricane season. Policies that contain hurricane deductibles must include a statement stating that the policy contains a separate hurricane deductible for hurricane losses, which may result in high out-of-pocket expenses.

Table 1: Florida Statewide Residential Hurricane Deductible Provisions as of April 21, 2006

Dwelling Limits

Minimum Deductible Allowed

Maximum Deductible Allowed

Mandatory Deductible Offer

Up to $25,000







$500 and 2%




$500 and 2%




$500* and 2%





Above $500,000




*For houses valued between $100,000 and $250,000, an insurer is not required to offer the $500 deductible if it guarantees it will renew the policy for one additional renewal period.

Policy Cancellation or Nonrenewal

If the governor declares a state of emergency because of a hurricane, Florida's insurance commissioner may order insurers to not cancel or nonrenew a property insurance policy covering a dwelling or residential property damaged by the hurricane for at least 90 days after the property has been repaired (i.e., substantially completed and restored so that it is insurable by another insurance company). If the insurer decides to cancel or nonrenew the property, it must give the insured at least 90 days notice that the policy will end 90 days after the property is repaired. The policy can be cancelled or nonrenewed sooner (1) for nonpayment of premium, (2) for a material misstatement or fraud, (3) if the insured causes an unreasonable delay in repairing the property, or (4) the insurer has already paid out the policy limits (Fla. Stat. Ann. 627.4133(2)(d)).

If the policy cancellation or nonrenewal is to take effect during the duration of a hurricane, the effective date is postponed until the end of the hurricane (Fla. Stat. Ann. 627.4133(2)(e)). Insurers cannot cancel or nonrenew policies because insureds file claims due to an act of God, unless the insurer can show, by claims frequency or other means, that the insured failed to take action reasonably necessary to prevent recurrence of damage to the property (Fla. Stat. Ann. 627.4133(3)).


Citizens is Florida's insurance safety net for homeowners in high-risk areas and others who cannot find property coverage in the private insurance market. The Florida Legislature created it in 2002 when it passed a law combining the Florida Residential Property and Casualty Joint Underwriting Association and the Florida Windstorm Underwriting Association.

Citizens is the largest property insurer in Florida, covering 1.2 million policyholders. Proponents say the creation of Citizens was necessary to make insurance available, particularly in areas of the state where private insurers will not sell policies. Critics contend that Citizens encourages continued development in high-risk areas.

Under Florida legislation enacted in 2006 (SB 1980), Citizens will no longer cover homes with a combined structure and contents replacement value of more than $1 million or vacation and second homes of any value, starting July 1, 2008. In these cases, homeowners will have to apply for coverage from either the voluntary private market or the surplus lines market. Citizens' coverage will only be available if an applicant can prove that coverage is unavailable elsewhere and then only for a limit of three years.


Following Hurricane Andrew, problems associated with the residential property insurance market developed in Florida.  Reinsurance capacity decreased and many insurers were forced to re-evaluate their exposure in Florida. State action was deemed necessary to stabilize the market, according to the Office of Insurance Regulation.  The legislature created the Florida Hurricane Catastrophe Fund (“FHCF”) in a November 1993 special session to provide a stable and ongoing source of reimbursement to insurers for a portion of their catastrophic hurricane losses in order to provide additional insurance capacity for the state. The FHCF is a state trust fund under the direction and control of the State Board of Administration of Florida (See, Fla. Stat. Ann. 215.555).

The FHCF acts as a state administered reinsurance program and is mandatory for residential property insurers writing covered policies in Florida.  Covered policies are residential property insurance policies that provide wind or hurricane coverage on structures located in Florida, including their contents and additional living expenses.  Certain collateral protection policies covering personal residences are also considered covered policies if they meet statutory requirements.


The FHCF supports a public-private partnership that preserves the private sector's role as the primary risk bearer. Three sources finance the FHCF: (1) premiums charged to participating insurers, (2) investment earnings, and (3) emergency assessments on Florida property and casualty insurers.


To help Floridians identify how they can strengthen their homes against hurricanes and to reduce hurricane damage exposure, the Florida Comprehensive Hurricane Damage Mitigation Program offers free home inspections by qualified hurricane mitigation inspectors to eligible homeowners. Grants are available for retrofitting depending on the insured value of the structure and the homeowner's income. Owners of mobile homes and manufactured housing are also eligible for grant money although they are not eligible for free inspections (Senate Bill 1980, Florida 2006 Regular Session).

Free Inspections and Grants

A Florida homeowner whose primary residence is a single-family, site-built home with an insured value of less than $500,000 and who has a homestead exemption will be eligible to apply for a free home inspection. If the primary residence is a unit in a residential building of up to four units, he is also eligible to apply for a free home inspection.  All unit owners in a residential building must agree to participate in the program to be eligible for free inspections.

Properties not eligible for free home inspections include mobile or manufactured homes, second homes, rental properties, apartments, and businesses.

Grants may be used for the following improvements: (1) roof deck attachment; (2) secondary water barrier; (3) roof covering; (4) brace gable ends; (5) reinforce roof-to-wall connections; (6) opening protection; and (7) exterior doors, including garage doors.

The Department of Financial Services must adopt rules governing the Florida Comprehensive Hurricane Damage Mitigation Program and establishing priorities for grants based on objective criteria that gives priority to reducing the state's loss from hurricanes. However, the department may further establish priorities based on the insured value of the dwelling, whether or not the dwelling is insured by Citizens, and whether or not the area under consideration has sufficient resources and the ability to perform the retrofitting required.

Advisory Council

The new law creates an advisory council to provide advice and assistance to the mitigation program administrator consisting of:

1. a representative of lending institutions, selected by the Financial Services Commission from a list of at least three persons recommended by the Florida Bankers Association;

2. a representative of residential property insurers, selected by the Financial Services Commission from a list of at least three persons recommended by the Florida Insurance Council;

3. a representative of home builders, selected by the Financial Services Commission from a list of at least three persons recommended by the Florida Home Builders Association;

4. a faculty member of a state university, selected by the Financial Services Commission, who is an expert in hurricane-resistant construction methodologies and materials;

5. two members of the House of Representatives, selected by the House Speaker;

6. two members of the Senate, selected by the Senate President;

7. the chief executive officer of the Federal Alliance for Safe Homes, Inc., or his or her designee;

8. the senior officer of the Florida Hurricane Catastrophe Fund;

9. the executive director of Citizens Property Insurance Corporation; and

10. the director of the Department of Community Affairs' Division of Emergency Management.


The Florida legislature created the Task Force on Long-Term Solutions for Florida's Hurricane Insurance Market in 2005 (SB 1486). The purpose of the task force is to make recommendations to the legislative and executive branches on keeping sufficient capacity in the property insurance market (private and public) to ensure continued availability of insurance coverage for hurricane losses.

The task force issued its first report in March 2006 with numerous recommendations, some of which were adopted by the legislature in 2006. Recommendations were made concerning, among other things, building codes, mitigation programs, mobile homes, the Office of Insurance Regulation, the Florida Hurricane Catastrophe Fund, Citizens Property Insurance Corporation, and reinsurance. A copy of the report is enclosed.