FLASH’s Leslie Chapman Henderson Warns of Deepening Insurance Crisis if Florida Building Commission Fails to Adopt Stronger Building Codes for Panhandle

FLASH Joins Department of Community Affairs Secretary Thaddeus Cohen and Insurance Commissioner Kevin McCarty in Calling on the Florida Building Commission to Enact Stronger Building Codes in Panhandle

Hollywood, FL (July 12, 2006) - Leslie Chapman Henderson, Vice-Chair of the Task Force on Long Term Solutions for the Florida Insurance Market, testified today before the Florida Building Commission in Hollywood, FL and said Florida’s property insurance crisis would only worsen if the panel fails to adopt a stronger residential building code for the Florida Panhandle than the commission is currently considering. Chapman-Henderson is also President and CEO of the Federal Alliance for Safe Homes (FLASH), an organization that promotes safer living through the strengthening of homes against natural and manmade disasters.

Chapman-Henderson joined a powerful line up of state officials today that included Thaddeus Cohen, Secretary of the Department of Community Affairs, and Kevin McCarty, Florida’s Insurance Commissioner, both of whom called on the Florida Building Commission to enact stronger residential building codes for the Panhandle.

“Our private insurance market is teetering on the brink of disaster,” said Chapman-Henderson. “If we fail to correct a bad policy that has allowed homes to be built in the Panhandle that won’t properly stand up to hurricanes, our private insurance market may ultimately collapse, leaving every Florida homeowner with little choice and even higher insurance premiums.” 

As private insurance companies continue to scale back their coverage in Florida, more and more Floridians are being forced to rely on the state’s insurer of last resort, Citizens Property Insurance Corporation, for their insurance coverage. Citizens has been wracked with deficits following the 2004 and 2005 hurricane seasons and these deficits are erased through a surcharge that affects every single policy holder in the state of Florida, not just Citizens policyholders.

The Florida building code mandates wind borne debris protection in new homes where winds of 120 mph or greater (or 110 mph within one mile of the coastline) are expected during hurricanes. However, when the new Florida building code was enacted in 2001, a large part of the Panhandle, from Franklin County to Escambia County, was exempted and the wind borne debris requirements currently extend only one-mile inland rather than the average five miles for the rest of the state. According to the Pensacola News Journal, much of the new residential development in the Panhandle is expected to take place beyond the currently proposed wind borne debris region.

Chapman-Henderson said the world’s insurance industry was watching the proceedings of the Florida Building Commission very closely and that a failure to adopt a uniform building code for all areas of Florida would send the wrong message to an already jittery market.

The ability of private insurance companies to underwrite policies in Florida rests on the availability of affordable reinsurance. Just in the past few weeks, several major insurance companies filed rate hike requests with the State of Florida in excess of 70%, citing the dramatic increase in their cost to acquire reinsurance as a key factor in their premium increase request.

Chapman-Henderson took aim today at the rationale used by those who oppose stronger building codes for the Panhandle. 

“In the world we live in today, we can no longer measure the affordability of housing based on the price you pay to buy or build your home,” said Chapman-Henderson. “Affordable housing must be measured in terms of whether a home survives a hurricane and can be reoccupied right away so moms and dads can go back to work and kids can return to school, from their own home, not from FEMA trailers or some other distant location.”

Chapman-Henderson said the best way to minimize damage from future hurricanes was to build stronger homes. “Our experience with the 2004 and 2005 hurricane seasons has proven that homes built to the new Florida building code performed much better than those built before the new code went into effect,” said Chapman-Henderson. “It’s time we embraced proven hurricane resistant building practices in the Panhandle.”