The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Fiscal Policy
BILL: CS/CS/SB 594
INTRODUCER: Fiscal Policy Committee, Community Affairs Committee and Senator Martin
SUBJECT: Property Insurance
DATE: April 17, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Favorable
2. Hackett Ryon CA Fav/CS
3. Thomas Yeatman FP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/SB 594 adds wind uplift prevention to the list of windstorm mitigation measures
undertaken by policyholders to reduce hurricane losses that must be evaluated for purposes of
mitigation discounts on residential property insurance rate filings. Wind uplift occurs if the air
pressure below the roofing system is higher than the air pressure above the roofing system.
The bill also exempts condominium unit owner policies from the flood insurance requirement for
Citizens Property Insurance Corporation personal lines property coverage, exempts certain
policies from rate increase limitations, and revises the provision requiring flood insurance
coverage by specified dates to base the dates by which flood insurance coverage must be
obtained on the dwelling replacement cost instead of property value.
The bill authorizes Citizens Property Insurance Corporation to adopt policy forms providing for
claim disputes to come before the Division of Administrative Hearings.
The bill provides a $750,000 nonrecurring appropriation from the Insurance Regulatory Trust
Fund to the Office of Insurance Regulation to conduct a wind-loss mitigation study.
Except as otherwise provided, the bill takes effect upon becoming a law.
BILL: CS/CS/SB 594 Page 2
II. Present Situation:
Regulation of Property Insurance Rates
Part I of ch. 627, F.S., the Rating Law,1 governs property, casualty, and surety insurance
covering the subjects of insurance resident, located, or to be performed in this state.2 The rating
law provides that the rates for all classes of insurance it governs may not be excessive,
inadequate, or unfairly discriminatory.3 Though the terms “rate” and “premium” are often used
interchangeably, the rating law specifies that “rate” is the unit charge that is multiplied by the
measure of exposure or amount of insurance specified in the policy to determine the premium,
which is the consideration paid by the consumer.4
All insurers or rating organizations must file rates with the Office of Insurance Regulation (OIR)
either 90 days before the proposed effective date of a new rate, which is considered a “file and
use” rate filing, or 30 days after the effective date of a new rate, which is considered a “use and
file” rate filing.5
Upon receiving a rate filing, the OIR reviews the filing to determine if the rate is excessive,
inadequate, or unfairly discriminatory. The OIR makes that determination in accordance with
generally acceptable actuarial techniques and considers the following:
 Past and prospective loss experience;
 Past and prospective expenses;
 The degree of competition among insurers for the risk insured;
 Investment income reasonably expected by the insurer;
 The reasonableness of the judgment reflected in the rate filing;
 Dividends, savings, or unabsorbed premium deposits returned to policyholders;
 The adequacy of loss reserves;
 The cost of reinsurance;
 Trend factors, including trends in actual losses per insured unit for the insurer;
 Conflagration and catastrophe hazards;
 Projected hurricane losses;
 Projected flood losses, if the policy covers the risk of flood;
 The cost of medical services, if applicable;
 A reasonable margin for underwriting profit and contingencies; and
 Other relevant factors that affect the frequency or severity of claims or expenses. 6
Florida Commission on Hurricane Loss Projection Methodology
Projected hurricane losses in a rate filing must be estimated using a model or method found to be
acceptable or reliable by the Florida Commission on Hurricane Loss Projection Methodology
1
Section 627.011, F.S.
2
Section 627.021(1), F.S.
3
Section 627.062(1), F.S.
4
Section 627.041, F.S.
5
Section 627.062, F.S.
6
Section 627.062(2)(b), F.S.
BILL: CS/CS/SB 594 Page 3
(Commission).7 The Commission consists of 12 members with expertise in the elements used to
develop computer models to estimate hurricane and flood loss. Members of the Commission
include State University System faculty experts in insurance finance, statistics, computer system
design, meteorology, and structural engineering; three actuaries; the insurance consumer
advocate; the Director of the Florida Hurricane Catastrophe Fund; the Executive Director of
Citizens Property Insurance Corporation; and the Director of the Division of Emergency
Management.8
Residential Property Insurance Mitigation Credits, Discounts, or Other Rate Differentials
Residential property insurance rate filings must account for mitigation measures undertaken by
policyholders to reduce hurricane losses.9 Specifically, the rate filings must include actuarially
reasonable discounts, credits, or other rate differentials or appropriate reductions in deductibles
to consumers who implement windstorm damage mitigation techniques to their properties.10
Upon their filing by an insurer or rating organization, the OIR determines the discounts, credits,
other rate differentials and appropriate reductions in deductibles that reflect the full actuarial
value of such revaluation,11 which in turn may be used in rate filings under the rating law.
Windstorm mitigation measures that must be evaluated for purposes of mitigation discounts
include fixtures or construction techniques that enhance roof strength, roof covering
performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and
window, door, and skylight strength.12
Wind Uplift
Wind load is an important consideration when designing a structure. Wind load is the load, in
pounds per square foot, placed on the exterior of a structure by wind. This will depend on:
 The angle at which the wind strikes the structure; and
 The shape of the structure (height, width, etc.).13
Wind can exert three types of force on a structure—shear load, lateral load, and uplift load.
Although all three forces can damage a structure, the uplift load has the greatest effect on the
roofing system.14 Wind uplift occurs if the air pressure below the roofing system15 is higher than
the air pressure above the roofing system. Whenever the wind blows over a roof’s surface, the air
pressure directly above the roof decreases, creating “negative” pressure. Wind infiltration below
7
Section 627.062(2)(b)11., F.S.
8
Section 627.0628(2)(b), F.S.
9
Section 627.062(2)(j), F.S.
10
Section 627.0629(1), F.S.
11
Id.
12
Id.
13
Wind Loads of Structures, Extension Disaster Education Network,
https://campus.extension.org/mod/book/view.php?id=6418&chapterid=6747 (last accessed on March 24, 2023). Wind Loads,
Structural Engineering Design, Fall 2003, https://ocw.mit.edu/courses (last accessed on March 24, 2023).
14
What Is Wind Uplift?, /how-roof-uplift-testing-can-help-ensure-system-performance(last accessed on March 24, 2023).
15
The term roof system refers to the air barrier or vapor retarder (if present), roof insulation (if present), and the roof
membrane, flashing, and accessories. Roofing Systems, Tom Smith, May 10, 2016, https://www.wbdg.org/guides-
specifications (last accessed on March 24, 2023).
BILL: CS/CS/SB 594 Page 4
the roof materials through openings creates “positive” pressure. The combination results in a
“push-pull” force that can lead to the separation of roofing materials from the roof deck.16
Wind uplift is affected by:
 Building height: Higher roofs experience stronger wind velocities.
 Geographical location: Wind maps for any region can identify the local basic wind speed
gust exposures to determine typical wind conditions for your home.
 Surrounding terrain: Neighboring buildings and other obstructions can break wind flow and
reduce the wind effect in suburban and urban locations. Stronger wind resistance is required
for roofs near large bodies of water or open terrain.
 Building openings: Openings in the building design can create higher internal pressures in a
wind event.17
During strong wind events such as hurricanes, roofs will be subject to high wind uplift forces,
which often leads to severe roofing component damage. The loss of roofing components could
lead to rainwater intrusion and further substantial damage to the interior. Reducing wind uplift
during such strong wind events by implementing targeted mitigation techniques18 can
significantly reduce wind effects on buildings' roofs.19 Engineers and builders follow the
applicable building code for each jurisdiction to attempt to prevent wind uplift.20 The standards
vary based on building location and likelihood of exposure to high winds.21
Citizens Property Insurance Corporation—Overview
Citizens Property Insurance Corporation (Citizens) is a state-created, not-for-profit, tax-exempt
governmental entity whose public purpose is to provide property insurance coverage to those
unable to find affordable coverage in the voluntary admitted market.22 Citizens is not a private
insurance company.23 Citizens was statutorily created in 2002 when the Florida Legislature
combined the state’s two insurers of last resort, the Florida Residential Property and Casualty
Joint Underwriting Association (RPCJUA) and the Florida Windstorm Underwriting Association
(FWUA).24
Citizens operates in accordance with the provisions in s. 627.351(6), F.S., and is governed by an
eight member Board of Governors (board) that administers its Plan of Operations. The Plan of
16
Id.
17
Understanding Wind Uplift Ratings for Roofing, Mark Gallant, May, 31 2021, https://www.decra.com/blog/ (last accessed
on March 24, 2023).
18
There are multiple products that are promoted as valuable in mitigating wind uplift, for example: pavers, adhesives,
fasteners, clamps, underlayments, and spray foam insulation.
19
Aerodynamic Mitigation of Wind Uplift on Low-Rise Building Roof Using Large-Scale Testing, Frontiers in Built
Environments, January 15, 2020, https://www.frontiersin.org/articles/10.3389/fbuil.2019.00149/full (last accessed on March
24, 2023).
20
How Wind Uplift can Affect a Commercial Building’s Roof, Certified Commercial Property Inspectors Association,
https://ccpia.org/how-wind-uplift-can-affect-a-commercial-buildings-roof/ (last accessed on March 24, 2023).
21
Id. Changes to Florida’s treatment of wind load were made in the 7th edition of the Florida Building Code in 2020. See
Wind Loads- Impacts from ASCE 7-16 (June 2020), https://www.ecf-fl.org/resources/ (last accessed on March 24, 2023).
22
The term “admitted market” means insurance companies licensed to transact insurance in Florida.
23
Section 627.351(6)(a)1., F.S.
24
Section 2, ch. 2002-240, Laws of Fla.
BILL: CS/CS/SB 594 Page 5
Operations is reviewed and approved by the Financial Services Commission.25 The Governor,
President of the Senate, Speaker of the House of Representatives, and Chief Financial Officer
each appoint two members to the board.26 Citizens is subject to regulation by the Office of
Insurance Regulation.
Citizens offers property insurance through three different accounts: a personal lines account, a
commercial lines account, and a coastal account.
The Personal Lines Account (PLA) offers personal lines residential policies that provide
comprehensive, multi-peril coverage statewide, except for those areas contained in the Coastal
Account. The PLA also writes policies that exclude coverage for wind damage in areas contained
within the Coastal Account. Personal lines residential coverage consists of the types of coverage
provided to homeowners, mobile home owners, dwellings, tenants, and condominium unit
owners policies.27
The Commercial Lines Account (CLA) offers commercial lines residential and non-residential
policies that provide basic perils coverage statewide, except for those areas contained in the
Coastal Account. The CLA also writes policies that exclude coverage for wind in areas contained
within the Coastal Account. Commercial lines coverage includes commercial residential policies
covering condominium associations, homeowners’ associations, and apartment buildings. The
coverage also includes commercial non-residential policies covering business properties.28
The Coastal Account offers personal residential, commercial residential, and commercial non-
residential policies in coastal areas of the state. Citizens must offer policies that solely cover the
peril of wind (wind only policies) and may offer multi-peril policies.29
Flood Insurance
The Flood Disaster Protection Act of 1973 (FDPA) 30 prohibits lending institutions from making,
increasing, extending, or renewing any loan secured by improved real estate or a mobile home
located in special flood hazard areas and in which flood insurance has been made available under
federal law, unless the building or mobile home is covered by flood insurance in an amount
equal to the outstanding principal balance of the loan or the maximum limit of coverage
available.
Under Florida law, an authorized insurer may issue a policy for flood insurance coverage,31 but
homeowners’ insurance policies typically do not cover flood losses.32 Although private flood
insurance may be obtained by endorsement or a separate policy, this requirement is generally
25
Section 627.351(6)(a)2., F.S.
26
Section 627.351(6)(c)4.a., F.S.
27
See s. 627.351(6)(b)2.a., F.S.,; Citizens, Account History and Characteristics,
https://www.citizensfla.com/documents/(Mar. 2016) (last visited Feb. 16, 2023).
28
Id.
29
Id.
30
42 U.S.C. s. 4012a.(b).
31
Section 627.715(1), F.S.
32
Disaster Rally, National Flood Insurance Program – How to Be Eligible, National Flood Insurance Program - How to Be
Eligible (disasterrally.com) (last visited Feb. 20, 2023).
BILL: CS/CS/SB 594 Page 6
satisfied with coverage obtained through the National Flood Insurance Program (NFIP) which is
managed by Federal Emergency Management Agency (FEMA).33 The NFIP offers flood
insurance coverage for buildings and content which must be purchased separately with separate
deductibles. For residential property, the maximum coverage amount is $250,000 for the
building and $100,000 for the contents and, for commercial property, the maximum coverage for
building and building contents is $500,000 each.34
Flood Zones
The National Flood Insurance Program with the Federal Emergency Management Administration
(FEMA) maintains flood maps to show a community’s risk of flooding. The map provides flood
zones to designate the flooding risks. Flood risk areas that are designated with the letters B, C,
and X on the FEMA flood maps are moderate to low-risk flood areas and have a reduced but not
completely removed flood risk. One in three insurance claims come from moderate to low-risk
flood areas. Flood risk areas that are designated with the letters A or V on the FEMA flood maps
have the highest risk of flooding. Owners of properties that are in a high-risk zone and have a
federally backed mortgage are required to purchase flood insurance as a condition of the loan.35
Flood Notice
An insurer that issues or renews a homeowner’s insurance policy without flood coverage must
include the following statement with the policy documents:
“FLOOD INSURANCE: YOU MAY ALSO NEED TO CONSIDER THE
PURCHASE OF FLOOD INSURANCE. YOUR HOMEOWNER’S
INSURANCE POLICY DOES NOT INCLUDE COVERAGE FOR
DAMAGE RESULTING FROM FLOOD EVEN IF HURRICANE
WINDS AND RAIN CAUSED THE FLOOD TO OCCUR. WITHOUT
SEPARATE F