A recent news article written by Ron Hurtibise, “Should Asphalt Shingle Roofs be Phased Out in Florida?” caught my attention because it would have a significant impact on Florida’s roofing industry and upon the vast majority of Florida homeowners. The article noted that Florida’s Insurance Commissioner Michael Yaworsky has suggested that the state should consider phasing out asphalt shingle roofs, noting that while these products are often guaranteed to last 30 years, they typically endure only about 20 years in Florida’s climate. Commissioner Yaworsky indicated in the article that further actions regarding roof surface types might be forthcoming, suggesting that it may be time to reconsider using asphalt shingles in Florida.
Asphalt shingles are more susceptible to damage from hurricane-force winds compared to metal or tile roofs. However, industry experts argue that when properly installed, asphalt shingles can effectively resist wind uplift and prevent water intrusion. They also highlight that asphalt shingles are more affordable than alternative roofing materials. The prevalence of asphalt shingle roofs has been linked to numerous insurance claims, particularly following hurricanes. This has led to regulatory changes, including the repeal of a Florida Building Code rule that required entire roof replacements when more than 25% was damaged and a state law change allowing insurers to cover the depreciated value rather than full replacement cost of roofs in basic homeowner policies.
The point of this post is that property insurance should always be considered a social product. Property insurance for structures has historically required communities to make the insured structures insurable. In the 19th century, as cities grew and fires became a significant risk to urban areas, city governments and communities implemented several measures to ensure that insurance companies found them insurable for writing fire insurance. These measures aimed to reduce fire risk and improve firefighting capabilities, thereby making urban properties more attractive to insurers.
One key initiative was the establishment of organized fire departments, either professional or volunteer, which replaced the informal and community-driven fire response systems of the past. These departments were equipped with advanced tools such as hand-pumped fire engines, steam engines, and eventually motorized vehicles, improving their efficiency. Cities also enacted stricter building codes to reduce fire hazards, requiring the use of fire-resistant materials like brick or stone in place of wood in densely populated areas. Zoning laws were introduced to separate high-risk industrial zones from residential and commercial areas.
Access to water was another critical improvement. Cities constructed reservoirs, installed water mains, and placed fire hydrants strategically throughout urban areas. Some even developed pressurized water systems to enhance firefighting efforts. Fire watch systems were implemented, with individuals tasked with monitoring for fires, particularly in high-risk districts, and lookout towers were established to spot fires quickly. Collaborations with companies like the Sanborn Map Company provided detailed fire insurance maps that illustrated fire hazards, building materials, and urban layouts. These maps allowed insurers to assess risks more accurately and set premiums accordingly.
Urban planning efforts further mitigated fire risks by creating wider streets and firebreaks to slow the spread of fires. Parks and open spaces were encouraged, acting as natural fire barriers. Public awareness campaigns promoted fire prevention practices, such as safe handling of open flames, responsible use of stoves and furnaces, and better waste management to reduce flammable debris. To attract favorable insurance ratings, cities worked with insurance organizations and underwriters to demonstrate improved municipal firefighting capacity and a commitment to risk mitigation. Areas with lower fire risks often received better insurance ratings, leading to lower premiums and encouraging business and residential growth.
Municipal fire alarm systems were installed to alert fire departments quickly when fires were detected, significantly reducing response times. Many cities also collaborated directly with fire insurance companies to align fire prevention measures with insurers’ risk management criteria. In some cases, insurance companies even helped fund or influence the organization and infrastructure of fire departments. Collectively, these efforts played a critical role in making urban properties more insurable and minimizing the devastating impact of fires in growing cities.
The insurance product is no longer limited to fire insurance as it was in the 19th century. Commissioner Yaworsky’s comments and views reflect that Florida’s insurance community may have to take significant steps to reduce the risk of loss from windstorms and hurricanes. This will be fought by those selling asphalt roofs and homeowners having to replace those lower-priced components of a home. But his question raises the question: What are we willing to do as a community to take action to make our structures more resilient and more insurable? There is no free lunch when it comes to the cost of property ownership. If one cannot afford the insurance, can one really afford the cost of the structure in the first place? What can we do to lower the long-term and overall cost of real property ownership?
After witnessing the relatively fewer and less severe losses to metal roof structures in coastal areas from Texas to Florida, I can see a day when our building codes may prohibit tile and asphalt roofs within so many miles of the coastline. This may not be popular in the short term, but we must demand more action to harden structures against the hurricane peril. Similarly, it must not have been popular to require the extra cost of fire sprinkler systems and non-wood framed structures to reduce fire loss 150 years ago.
I was invited to testify on a panel before the Florida Insurance and Banking Subcommittee tomorrow afternoon. The panel discussion will be on Homeowner’s Property Insurance Cost Drivers. Understanding the history and principles of property insurance is a crucial first step for our elected representatives and policymakers before writing new laws and regulations.
I will have a follow-up blog tomorrow morning about the historical need to hold property insurers legally accountable for their actions during claim processing. Floridians are losing faith in the insurance product because it costs a lot more, it does not provide as good coverage as it once provided, and they have little recourse to hold their insurers accountable when claim delay or wrongful claim denial occurs.
Thought For The Day
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
—Warren Buffett
