Insurance Breaks for Roof Sets
State Orders Discount for Hail-Resistant
Homes
By Terrence Stutz
Austin Bureau
of The Dallas Morning News
Austin—Homeowners who install
hail-resistant roofs will get insurance
breaks of up to 23 percent in Dallas
county and 34 percent in Tarrant
County under a program ordered Thursday
by state Insurance commissioner Elton
Bomer.
The discounts, which apply to roofs
put on after Feb. 17, will save the
typical homeowner a couple of hundred
dollars a year in insurance premiums.
In approving the mandatory discounts—the
first of their kind in the United
States—Mr. Bomer noted that
more than 40 percent of homeowner
losses in Texas are caused by hail.
"Homeowners who install hail-resistant
roofs will save money on their insurance
and avoid the headache of replacing
roofs after hailstorms," he
said.
Mr. Bomer estimated that the discount
program eventually could prevent
hundreds of millions of dollars in
property damage in the state.
Most hail-damaged roofs in recent
years have been in the Dallas-Fort
Worth area and North Texas, where
mammoth property losses have been
sustained. Those losses forced insurance
premiums higher and made it difficult
for homeowners to find affordable
coverage.
A report to the commissioner indicated
that hail-resistant roofing materials
would cost $600 to $1,000 more than
a conventional roof.
Department of Insurance officials
said the extra cost could be recouped
quickly in an area that regularly
experiences hailstorms.
"Homeowners should take a look
at the cost of new, stronger roofs
vs. the expected savings on their
premiums" Mr. Bomer said.
"For the worst hail-prone areas,
homeowners should be able to recover
the cost of a new roof in just a
few years."
For example, the standard premium
in Dallas County is scheduled to
rise to $716 for an $80,000 brick
veneer home and to $862 for an $80,000
frame home next year. The maximum
discount of 23 percent for a hail-resistant
roof would save $165 a year on the
brick home and $198 on the wood home.
Actual savings will vary because
companies can charge above or below
the standard rates.
Although the options for hail-resistant
materials are still limited, the
commissioner said he expects that
will change as consumer demand rises.
Hail-resistant roof coverings are
now either reinforced composition
shingles or concrete tiles. In addition,
some manufacturers are developing
rubberized shingles made out of old
tires.
Four classes of discounts would
be available depending on the ability
of the roofing material to withstand
hail damage.
The discounts on annual premiums
range from 6 percent to 23 percent
in Dallas, Collin, Denton and Rockwall
counties. They range from 9 percent
to 34 percent in Tarrant County and
from 4 percent to 17 percent in Ellis
and Kaufman counties.
Companies whose rates are not regulated,
including Lloyds subsidiaries of
major insurers, would determine their
own discounts.
Savings would be greatest in areas
with a history of damaging hailstorms.
To qualify for the discounts, roofing
materials would have to be tested
in a procedure developed by Underwriters
Laboratories. In the test, varying
sizes of steel balls are dropped
on the materials, which are then
examined for damage.
In response to complaints from homeowners
who already have hail-resistant roofs,
Mr. Bomer said insurance companies
may extend the discounts to roofs
installed before Feb. 17. But it
is up to the insurer whether or not
to give the discount.
The effective date was picked to
give insurance companies a month
to prepare for the change.
One Dallas homeowner had argued
at a public hearing last month that
it would be unfair to exclude from
mandatory discounts the thousands
of hoes that already have been protected
from hail.
However, insurance officials have
indicated it would be nearly impossible
to conduct strength tests on all
existing hail-resistant roofs in
the state.
Mr. Bomer also said he will propose
discounts for metal roofs at a later
date after his staff has determined
appropriate amounts.
But metal roofing manufacturers
objected to the exclusion, and Mr.
Bomer agreed to look at the issue
again. His solution is to order premium
discounts on the condition that cosmetic
damage be excluded in the coverage
on homes with metal roofs.
Insurance industry representatives
were generally supportive of the
proposal.
"The ruling today will offer
added protection for homes in Texas
and allow people a chance to offset
the cost of replacing their roofs
with insurance discounts," said
Charity Judah of the southwester
insurance Information Service.
Rick Gentry of the Texas Insurance
Organization said the credits are "a
critical step to breaking the cycle
of recurring losses in hail prone
regions, where storm damaged rooftops
of uncertain or inferior grade materials
would be replaced with similar products,
only to be damaged by the next storm
and replaced again."
Mr. Gentry also said the program
will give insurers an incentive to
increase their presence in traditionally
high-loss regions.
Of the $1.3 billion in homeowners
insurance losses in Texas last year,
$531 million was the result of wind
and hailstorm. |
