I’ve owned several different kinds of homes in two different states. One house was near the Atlantic Ocean while several others were in historic downtown districts. They ranged from newer homes to a couple of properties that were over 100 years old. They have been constructed using both concrete blocks and wood frames. You name it—my wife and I seem to have some experience. Along with that experience comes the issue of insuring those properties. Recently, we put a standing seam metal roof on a historic downtown rental home. To our surprise adding this “100-year” metal roof raised our insurance rate by about $400 compared to a 20-year asphalt shingle roof that cost half as much.
No, that makes no sense, and yes, I was told why. I figured I’d write an article about my experience and just what causes insurance companies to do this—at least in Florida. Perhaps it will help you as you do the math the next time you plan a new roof replacement for your Florida property.
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Why Would a Better Roof Cost You More Money?
So exactly why would a standing seam metal roof cost you more in insurance than a cheaper shingle roof? After all, a shingle roof in Florida lasts around 12-15 years (at most) while a well-maintained metal roof lasts up to 30 years or more. Upgrade to a standing seam metal roof and you’re looking at 50 years…easy. Most installers will tell you these roofs can last up to 100 years. You should never have to replace it unless you’re under age 30 when you install it or your name is Dorian Gray.
The reason for the additional $400 comes down to insurance companies trying all they can to recoup costs in a market that has been quite difficult over the past several decades. Rather than take a long view that a standing seam metal roof affords more protection against wind and rain than shingle and far exceeds minimal building codes, they focus on replacement cost. A standing seam roof costs more to replace, and the insured home typically requires replacing a damaged roof with the same material.
That explains why insurers can charge more for a metal roof even though it affords more protection and life. The real question, however, is: How did we get to such a place where insurers don’t reward homeowners for spending more on quality roofing materials? I’ll attempt to answer that by covering a few interesting points about the (unfortunately unique) Florida insurance market.
Florida Has Been Rife with Insurance Fraud for Many Years
If you ask around, nothing compares to the frustration of insuring a home in Florida. Due to home insurance fraud (not hurricanes), rates are out of control. This has made existing homes (in particular) more difficult to insure as insurers have left the state in droves. Is this due to the number of hurricanes that hit the state every several years?
No. It’s due to insurance fraud.
How the Fraud Works
Until a couple of years ago, in Florida, a roofer could go door to door and convince a homeowner to submit an insurance claim for a new roof. The roofing company would allege there was damage caused by a recent/past Hurricane (like Irma in 2017).
Florida law requires that, in most cases, home insurers need to replace the full roof when there is damage. The next step in the fraud involved getting the homeowner to sign an Assignment of Benefits agreement and an “advertising agreement”. That let the roofing company “compensate” the homeowner for approximately the amount of the deductible.
The roofer gets a job and the homeowner gets a “free” roof replacement—often when they didn’t even need one.
Under Florida law, this is illegal…but it didn’t stop companies from skirting the letter of the law through clever workarounds. That “advertising agreement” mentioned above? That offset the deductible. After all, no homeowner wants a “free” roof (when they don’t really need one) if they have to pay out 2% of their policy coverage amount. Prefund that through an advertising campaign (read: let us put a sign in your yard) and the scam is complete.
Why Don’t Insurance Companies Fight Back?
The obvious question is: Why don’t the insurance companies fight back against fraudulent claims? They do. Often an insurance company will deny or reduce a claim after inspecting a roof and finding little or no damage compared to the claim.
However, because the roofing company got the homeowner to sign an Assignment of Benefits document, they can take the legal case to the insurance company directly. They no longer need the homeowner to be involved.
It doesn’t matter if the insurance company fights the inevitable lawsuit or “settles” the matter by paying the claim. The result is the same. The insurance company lost money and insurance rates go up to compensate.
What Happened Next
What happened next was predictable. As these scams worked, home insurance fraud skyrocketed across the state. Homeowners participated in droves with fraudulent roofers who perpetuated the scam.
Just to be clear—most homeowners didn’t necessarily realize this was even a scam. How many times do you go up on your roof? They simply let a roofer take a free look to inspect for damage. The roofer then reported that there was indeed damage and blamed a recent storm. Afterward, they offered a free replacement with no practical out-of-pocket deductible to the owner.
You can see how this might have caught on.
Annual Florida Homeowners Insurance Rate Hikes
The annual cost of Florida homeowners insurance is all over the map according to a host of online resources. It’s not even worth quoting as the numbers range from less than $1,600 to over $4,500. I’m not citing sources as that would honor their poorly-cited and inconsistent data.
Instead, let me tell you my personal insurance history. In 2017 I insured a 1200 sq. ft. historic home with typical replacement coverage and 100/300k liability with Gulfstream for $1,226. By the way, that company went out of business on July 28, 2021…you can’t make this stuff up!
Fast forward to 2024 when I received a renewal quote (similar coverage) from American Integrity for $3,232. I had exactly two options for coverage on a house that old—and one of them was Citizens.
That’s an increase of around 263% (approaching 3X). This puts Florida at the top of the list for annual homeowners insurance costs. Lest you think that’s an isolated situation, another home built in 2002 had its rate go from $1,440 to $3,932 in just 6 years. That’s an increase of 273%.
What may come as a surprise is that Florida hosts 79% of all homeowners insurance lawsuits nationwide while only making up 9% of all actual claims. So we create most of the lawsuits and less than 10% of the payouts…even with our notoriety for hosting hurricanes.
Legislation to the Rescue?
This recipe for disaster encouraged the Florida governor to call on the legislature to hold a special session regarding property insurance back in 2022. A couple of details dropped in that call including the lawsuit/coverage percentages I mentioned earlier:
- Florida’s general tort environment has led to thousands of frivolous property insurance lawsuits.
- The Florida insurance industry has seen two straight years of net underwriting losses exceeding $1 billion each.
- In the last three months (Q1 of 2022), three insurance companies writing homeowners coverage in Florida have gone insolvent and are either in liquidation or rehabilitation and numerous others have non-renewed policies or ceased writing new business, leaving tens of thousands with limited options for seeking coverage.
- Citizens Property Insurance, the State of Florida’s public insurer of last resort, has seen an increase of 399,822 policies since the beginning of 2020 and was on track to be over 1 million policies by the end of 2022.
Since 2017, eleven property and casualty companies offering Florida homeowners insurance have liquidated. Six of those companies, including the most recent, United Property & Casualty Insurance Company, have liquidated since 2022.
Each time that happens, the Florida Insurance Guaranty Association (FIGA) pays out any outstanding claims. They then (fairly regularly now) make assessments that raise the price of insurance for everyone else in the state.
Solving the Problem
In June 2021, Governor DeSantis signed Senate Bill 76. This prohibits contractors and their agents from soliciting residential property owners in almost any way. They cannot encourage or instruct them to contact a contractor to file an insurance claim for roof damage. It also bars them from offering compensation in exchange for access to perform a roof inspection or to file an insurance claim. These rules carry a penalty of up to $10,000 per occurrence.
It also—and this is important—bars any property insurance claim or reopened claim after 2 years from the date of loss. That keeps anyone from going back to a roof 2+ years after a storm and attributing the damage to a past hurricane or tropical storm.
Finally, the bill set some guidelines for processes and fees for filing lawsuits regarding homeowners insurance claims.
On December 16, the governor signed Senate Bill 2-A which pretty much eliminates the assignment of benefits. If you remember above, this allowed roofing companies to sue insurance companies without the involvement of the homeowner. Specifically, this bill prohibits the assignment, in whole or in part, of any post-loss insurance benefit under any residential or commercial property insurance policy issued on or after January 1, 2023. Since policies are typically renewed annually, all current policies no longer allow the assignment of benefits.
Is It Enough?
In a word: No. Not even close. Florida currently allows insurance to “cherry-pick” what they offer in the state. Instead of averaging a company’s loss potential across housing, life, and auto—Florida lets a company offer life and auto insurance while declining to offer home insurance.
That also has to stop.
In addition to further tort reform, one of the ways a company can manage losses is by distributing risk across its entire portfolio. By letting companies pick and choose what they offer in the state, they can maximize profits while avoiding loss potential. Currently, many loopholes allow national companies to more or less pull out of offering homeowners insurance in Florida while offering it to the rest of the country.
Doing the Math on a New Roof in Florida
Clearly, the greatest problem lies with older homes. New homes still have plenty, albeit expensive, options for home insurance coverage. Still, when it comes time to replace that roof—consider the potential rate hike that could accompany it.
In terms of the math, let’s take a look at my recent rate hike. Since this roof covers a ~1300 sq. ft. building the size and assumptions are fairly solid. Compare the various costs for a roof (based on actual estimates):
| Asphalt Shingle Roof | Exposed Fastener 26ga Metal Roof | Standing Seam 26ga Metal Roof | |
|---|---|---|---|
| FL Life Expectancy | 12-15 years | 20-30 years | 50+ years |
| Wind Rating | 110 mph | 140+ mph | 160+ mph |
| Tear-Off | Yes | No | Yes |
| Underlayment | Tar paper | None | Self-adhering |
| Exposed Fasteners | No | Yes | No |
| Energy Efficiency | Poor | Fair to Good | Fair to Good |
| Color Choices | Basic | Wide Variety | Wide Variety |
| Cost per Square | $7.69 | $10.94 | $14.74 |
| Total Cost (1300ft2) | $9,997 | $14,222 | $19,162 |
| Add’l Premium | – – | $250 | $400 |
| Add’l Premium (15 yrs) | – – | $3,750 | $6,000 |
| 15-year Cost | $20,994 (new) | $17,972 | $25,162 |
| 30-year Cost | $33,090 (new) | $37,366 (new) | $31,162 |
| 45-year Cost | $46,396 (new) | $37,366 | $37,162 |
Reading This Chart
If you look at the chart above we included only minimal inflation as a function of the roof replacement costs (but not the insurance premiums). With that said, it’s a good bet that you’ll be “in the black” in 30 years with a standing seam metal roof. At that point (in Florida) you’ll have had to replace a “35-year” architectural shingle roof twice. Additionally, you will likely be looking at replacing your exposed fastener metal roof.
It is also likely that you have had to—before 30 years—replace all of the fasteners in your metal roof. This occurs naturally unless you go with a standing seam metal roof.
Once you pass 30 years, that standing seam roof looks pretty sweet. You have had a covering over your house that has been virtually maintenance-free (and will be for another 20+ years). At that point, you’ll need to replace your asphalt shingle roof for the third time.
I set out to demonstrate something in this article. Hopefully what happened to me will stop shortly in this state as legislation proceeds in a better direction. If so, the cost comparison between roofing types gets even clearer. In no world should your insurance company be charging you more for adding a nicer roof. Instead, they should reward you—or at least offset you with discounts. If that were the case, that standing seam total remains $19,162 and beats asphalt shingles at your first re-roof.
Final Thoughts
To me, installing a standing seam metal roof in Florida still makes sense. It’s very unfortunate that insurance companies punish folks like me for playing the long game, however. Perhaps that will not be the case in the next few years.
The solutions to this problem aren’t simple and involve legislation, consumer awareness, and strong leadership. Each component is a necessary piece of solving a larger problem of runaway costs. Hopefully, the state will continue to mull over these necessary steps to encourage competition, reduce frivolous lawsuits, and lower home insurance rates in the state.
And maybe, just maybe, folks like me will one day be rewarded when they spend extra money to protect a house covered by one of those policies!
