Florida Insurers Plan to Reject Asphalt Roofs

An industry exec hints at phasing out coverage for shingles altogether, now that a trifecta of manmade and natural risks have made them a policy pariah.

Kudos to the Orlando Sentinel for calling attention to a disruptive housing comment made by a Florida insurance executive last week: 

Michael Yaworksy (Florida’s insurance commissioner) told a crowd of insurance executives.  “It’s probably time to look past asphalt shingles … You know, these products that are guaranteed to last for 30 years. They don’t last for 30 years in Florida. They just don’t.”

Before I unpack the building science of shingle lifespan, I’m well aware that phasing them out will cause a huge disruption for homebuilders and manufacturers, resulting in costs passed on to homebuyers. Pros will likely push back strongly against the move, but they don’t have much leverage.

The insurance industry has already shown it’s willing to simply walk away from Florida. And some insurers already refuse to cover any shingle roof more than 15 years old.

Without insurance, however, new home construction could grind to a halt.  Banks won’t underwrite mortgages on uninsured homes. 

What’s Changed?

Why is the insurance industry talking so tough about asphalt roofing now?

They blame these products for their financial woes. 

First, unscrupulous roofing contractors exploited loopholes to file thousands of fraudulent claims. At the same time, damage from frequent and powerful hurricanes has wreaked havoc. But the third factor, in my view, is one that’s little recognized: accelerated aging of asphalt roofs due to more extreme heat.

Some action has been taken on the fraud problem. The Florida Building Code up had required that a whole roof be replaced if more than 25% of it was damaged in a 12-month period. Legislation in 2022 changed that rule, making it harder to bill an insurer for a modestly damaged roof.

On the hurricane front, the State keeps getting slammed by powerful storms. While hurricanes are not new, their intensity has increased, according to new research.  And they’re predicted to continue doing so.  

The Age Factor

New asphalt shingles perform well in all but the most powerful hurricanes, old ones, not so much. 

So, if you drill down on criticism of asphalt shingles, the key issue is loss of durability loss over time. They have a steeper aging curve than other roofing options. As years pass, they become more brittle and less effective. However, not all shingles are created equal. 

At about ten years, age catches up with asphalt shingles hit by high winds. Source: IBHS

Numerous studies have looked at asphalt shingle performance in hurricanes. On the upside, asphalt roofs suffer less damage when they’re new, less damage when they’re thicker, architectural brands, and less damage when storm winds do not exceed about 95 mph. The downside, however, is that once winds reach 120 mph or more, the likelihood of some damage to all but the newest asphalt roofs goes up dramatically, particularly among non-premium brands.

I’ve visited several post-hurricane sites in Florida and consistently seen new asphalt roofs unscathed after major hurricanes. For example, I remember touring the storm ravaged neighborhoods of Punta Gorda after Hurricane Charley back in 2004, where winds hit 150 mph, and being surprised to see how many newer homes with asphalt roofing suffered no damage whatsoever.

The building code had just been enacted in 2002, so homes built before that time suffered the worst damage.

Can the Market Switch to Metal and Tile?

Metal, tile and concrete tile generally demonstrate better long-term viability than asphalt in high stress environments such as Florida. But the cost difference between these products and asphalt should not be underestimated.

Florida’s average family income hovers around $67,000. For a family to afford a $300,000 home, the rule of thumb is that their income should track at about $100k annually. Add $30,000 to the roof cost, and you lock even more people out of ownership.

The chart below shows how dramatically different other roof options are in terms of cost. Note that this data does not include the long-term ROI for these materials. For example, a tile roof that lasts for 100 years may cost five times as much as asphalt, but the overall cost per year of service life is not so different. 

The reality, of course, is that most people don’t stay put and hand homes down for generations, so it’s hard for them to rationalize putting a huge chunk of their budget into a “forever”’ roof.

As a general rule, alternative roofing that costs more lasts longer, even in Florida’s hot climate. But the impact on new home costs will shut many first time buyers out.

One has to assume that insurers are counting on homebuilders simply switching to 

more durable materials as a way to “fix” the roofing situation. It’s true that builders often dig in their heels when any changes to “the way we’ve always done it” are proposed, but this is a big one, and they’re not wrong to worry about the economic implications.

Easing the Transition

Asphalt-based shingles have their problems, not the least of which is their impact on landfills. Only about 10 percent of shingle waste is recycled, mostly into road aggregate. As a product category, it’s hardly what you’d call environmentally benign. It’s unlikely they can improve that pace fast enough to make a case for the product’s “green” attributes.

But rather than a sudden lockout, as suggested by insurers, why not offer a transitional path? Insurers could instead develop a checklist specifying premium brands and best practices. If they were to highlight the best products on the market, ones with the longest warranties (and thus the flattest bell curve of degradation) they could give roofers and builders time to tool up and plan their transition to more durable alternatives.

For example, as I wrote an article about cool roof technology, it’s time for all asphalt roofs in the Southeast to upgrade to cool technology. It’s essential to extend the service life of shingles, given the harsh effects of Climate Change-driven extreme heat.

The threat of excluding asphalt from insurability is not an idle one. A big change is coming. The issue is whether builders and trades will be caught by surprise, or work with insurers to make the switch to alternative roofing less damaging to their businesses.