MITIGATE BEFORE IT’S TOO LATE

January 23, 2013Robin Smith Westcott, Esq.

Florida Insurance Consumer Advocate Tallahassee, Florida

Senate Banking and Insurance Committee

CENTRALIZE – CONSOLIDATE - MITIGATE

ADVISORY COUNCIL PUBLIC MODEL

DATABASE OF MITIGATION LEVERAGE OF FEDERAL FLOOD PROGRAM RESTRUCTURE MITIGATION CREDITS COMMERCIAL PROPERTIES

MITIGATION PROGRAMS & GRANTS OUTREACH & EDUCATION

Move Responsibility for thePublic Model

OIR DEMPublic Model

Office of Insurance Regulation

Division of Emergency

Management

Centralize Data

• Hurricane Risk• Sinkhole Risk• Mitigation Features• Insurable Values• Rating Information

-

0.50

1.00

1.50

2.00

2.50

0.75

2.12

Residential Insured Property ValuesState of Florida

$ Trillions

Source: 2012 FHCF Annual Ratemaking Formula Report

Market Value Does not EqualReplacement Cost

Broward CountyBuilt 1978   Square Foot 1475

2001 Purchase Price  $163,0002003 Purchase Price $216,0002008 Purchase Price $185,0002012 Market Value  $163,840 

Insurance Coverage A Limit $224,600  - Premium $2,420

Yes No Total/AvgNumber of Homes 76,225 228,423 304,648 Average Insured Value 628,806 363,193 429,651 Average Square Feet 2,279 1,733 1,870 Average Age 37 42 41 Average Premium 2,570 1,993 2,138

Note:

HW2, DW2, DP1, DP3, & HO3 policies as of 12/31/10.

Coastal AccountRisk Profile

Hurricane Impact Opening

Protection

Mitigation in the Coastal Account is

Better Bang for Buck

For every $1.00 spent on reinsurance and Cat bonds the expected recovery is .16 cents.

For every $1.00 spent on mitigation the expected loss savings is $2.00.