CCS Coffee Conversations - Navigating Insurance Challenges for Commercial Roof Restorations - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Josh Poole, Chip Case and  John Hall. You can read the interview below, listen to the podcast or watch the recording.

Megan Ellsworth: Let's get started. Good morning, everyone. As I said before, this is the inaugural coatings coffee shop.com, coffee conversations. Thank you all for being here. Um, I'm really excited to be here with my esteemed guests and, um, we're gonna be talking about insurance, um, insurance challenges for commercial roof restorations and everything going on in Florida. So, um, I'd like to first just do some housekeeping. Thank our sponsor APAC and our CMA for helping put all this together and getting these nice, amazing, um, gentlemen here to chat with me about insurance in Florida. And, um, thank you APAC for being just a great partner. They're the, um, premier sponsor of coatings coffee shop.com and, um, we're just really happy to work with them. So I wanted to let you all know that this will be up on coatings coffee shop.com in about 24 to 48 hours to watch back if you really love it, and send to all your friends and coworkers. Um, if you are in the chat, uh, just send a message. Good morning, let me know where, let us know where everyone's zooming in from and please, throughout the conversation today, if you have questions or comments, get in the chat and we will try to answer as many of your questions as we can. Um, okay. So now it's time to introduce my esteemed guests. First. Josh, who are you? And, uh, where do you, where do you, where are you zooming in from? <laugh>? 

Josh Poole: Yeah. Uh, thanks, Megan. Um, my name is Josh Poole. I am, uh, director of Product Management for tremco. I'm, I'm zooming in from, uh, Northeast Ohio here today. Um, 

Megan Ellsworth: Is it, 

Josh Poole: And, uh, just a brief background on myself, um, I'm approaching, uh, 20 years in the industry, which is kinda hard to, to believe at this point. Um, held a lot of roles during my time, uh, from customer service to, uh, tech, uh, service, sales management. And over the past decade, I've, I've, uh, kind of hunkered into product management and and enjoyed doing, uh, you know, that, uh, that work. Uh, in addition to my work at tremco, I'm also the current president of RCMA, which is the Roof Coatings Manufacturers Association. 

Megan Ellsworth: Yes. 

Josh Poole: Um, and I'm also active member of NRCA. 

Megan Ellsworth: Absolutely. Thank you, Josh. Okay, next chip, who are you and where are you zooming in from? 

Chip Case: Hi, my name is Chip Case. Um, I am a professional lobbyist or governmental consultant, is probably, uh, uh, you know, the fancier way to explain what I do. Um, I have owned my own firm, uh, for approximately 15, 16 years now. I've worked in Florida politics, um, for, um, closer to 28 years. Uh, and, um, previous roles I've worked in, I've been, uh, the executive director for the Republican Party of Florida. Uh, major donor maintenance guy for the Republican Party of Florida. Uh, political advisor to seven speakers, three senate presidents, um, deputy Chief of staff for Speaker of the House. Uh, and, uh, after all that decided I was gonna go out and lobby. So I currently represent a variety of clients, everything from child welfare to, uh, major corporations like, uh, uh, Florida Crystals, sugar Company, um, at and t and other groups like that. So, um, that's and I am Tallahassee based, um, uh, the epicenter for what we're trying to do with Citizens Insurance and, uh, kind of correct and fix some, some issues that I think you guys are having, um, uh, here in Florida, but then globally as well. I think whatever we can get done here in Florida is gonna be a good blueprint for what you guys will be able to do in other states if you're having the same similar problems that we're having. 

Megan Ellsworth: Absolutely. Thank you so much, chip, what a resume. Wow, <laugh>. I'm really glad to have such a pro professional and wealth of knowledge here, so thanks for being here. Um, John, who are you? <laugh>? 

John Hall: Howdy, howdy. Um, I'm John T. Hall. So I've been in the, uh, roofing industry about 30 years. Um, started my career as a contractor, um, had offices and and worked, uh, kind of south southeast us so from Oklahoma, Texas, all the way over to the east coast. Um, spent about eight years on the manufacturing side where I led the, uh, roof coatings and roof sealants product group for the largest coating manufacturer in the world. And, um and then since then, I've spent about eight years as a roof consultant. Um, I do work globally. Um, my specialty is roof assessment, testing, uh, failure analysis. I do a lot of work, um, with insurance carriers as well as property owners, contractors. So kind of the full gamut. I, I, you know, I bridge all of them. Um, where really my, my specialty is, is moisture and, you know, kind of determining, um, if roofs have failed, how they failed. And in that I am a big proponent of roof restoration and performing the due diligence and testing to ensure proper restorations, um and long lasting restorations. So, so, but I do all types of, of roof consulting. So that's me in a nutshell. Oh, and I, uh, I am based in the Florida panhandle near Panama City, but today I'm on assignment on location in southeast Florida. 

Megan Ellsworth: Amazing. So you made the drive yesterday. That's right. 

John Hall: <laugh>, you made home 

Megan Ellsworth: Safe or to the job safe. Nice. Um, okay. So gentlemen, I just wanna level set. Josh, you can, uh, maybe take this first, what is going on with, um, insurance and restoration work in Florida? Just to set the stage for us. 

Josh Poole: Yeah. Um, this, uh, we can go a long ways back in history of insurance in the state of Florida, but, uh, for the purposes of this call, I think probably this story probably starts about three decades ago. Um, we had mounting repair costs that were following natural disasters that were kind of wreaking havoc in the state of Florida. Uh, and this create a cause and effect that's currently impacting the residents of Florida today. On the positive side, uh, you know, this shed light on the need for improvements that be needed to building code requirements and upgrades and and that facet. So over the past few de decades, there have been a number of improvements that have been made, uh, to the state building code itself and that's led to buildings and structures that are just built better and better equipped to withstand hurricane damage in particular. 

Josh Poole: Um, you know, on the negative side, the, the hikes and adjustment costs that stemmed from those events, you know, led many insurance companies to begin exiting the state limiting, uh, you know, coverage and policies that they provided. And all this prompted Florida's state legislature to establish a state run Citizens Property Insurance Corporation back in late, uh, 2002. So originally this corporation was intended to be a, a stop gap kind of last resort option to help residents gain coverage where they may not have been able to in the private sector. Um, and it was only anticipated to account for a small percentage of the insurance policies, uh, within the state. So over the next subsequent 20 years, uh, cost for insurance companies have continued to balloon. Uh, there's been a number of reasons. Some of that's been, you know, uh, unsubstantiated claims that have led to full roof replacements potentially in, uh, cases where that hasn't necessarily been the, the correct call or the right solution. Uh, more insurance companies have left the state. And, uh, the, you know, as of, uh, couple years ago, citizens became the largest insurance provider in the state of Florida. So on very unintended consequence there. Um, so in an effort to combat rising claim cost in 2023, Florida lawmakers in collaborations with, uh, citizens and other insurers enacted legislation that allows insurance companies the right to deny coverage for roofs that are older than 15 years. 

Megan Ellsworth: Okay. 

Josh Poole: And that's, that's kind of a, a quick recap on what's happened and brings us kind of where we're at today. 

Megan Ellsworth: Yeah, absolutely. John or Chip, any, um, anything to add on just the history of, of, of Low Slope Roofing in Florida and, um, some of these insurance changes that have happened over the years. 

Chip Case: Um, Josh, I'm gonna let you, I'm gonna let you take, uh, that since you understand that Low Slope Roofing, um, uh, different products and, um, uh, what's currently being used here in Florida 

John Hall: Or John. Yeah, I'll, I'll, yeah, I'll jump in. So, you know, one of the, the key things here is, is I think this bill was intended to be more residential homeowner driven and we've had a, unfortunately we've had condominiums and large multifamily properties get that's gotten lumped into that. Now, the big problem with that or one of the big problems with that is, you know, a traditional steep slope residential home, a a single family home has a very simple roof system. It's usually an underlayment and a shingle or metal, um, very minimal components. Um, largely the system is exposed to weathering and uv, et cetera, with a condo or a multifamily property or a, a low slope roof that is a very robust and complex roof system. You know, we have, we have a, a a, a roof cover on these that can be, you know, an asphalt built up roof can be a half inch to an inch thick, um, versus the thickness of a shingle. Um, and then we've got, you know, three to 10 to 12 inches of insulation below that. So unfortunately, we've got these very robust, complex, well-engineered systems that have been lumped into a simple shingle, nailed into a, you know, five, eight eights p plywood with an inch, inch and a quarter nail. And they've all been lumped in together and it really, um, has, has caused pretty significant damage to the industry. So from a, from a high level perspective, um, these, these roof systems shouldn't be lumped in and categorized the same. 

Megan Ellsworth: Yeah, agreed. Okay. So what does the legislative language look like for insurance policies, um, in the state of Florida? And we have this up on the screen chip, can you kind of go into what this is and what that legislative language is looking like? 

Chip Case: Yeah, absolutely. And so, um, what we did, um, going back probably about, uh, about four weeks ago was we took a stab at doing some, um, some suggested bill language or some suggested amendment language, uh, to the state statute. Um, originally we, we tried to meet with citizens to see if there's something that we could do administratively, unfortunately, I just, I just don't think we're gonna get there. I'm just gonna continue to chat with them. But I think, I think having legislation, um, does two things. First of all, um, they have to do whatever the policy makers say that they have to do. So that's the importance of legislative aspect of it. Um, and because the legislators are, are, are concerned about the insurance market here in Florida, they're also, uh, very concerned about their constituents. So, uh, if, if, if having to replace your roof on your South Florida condo every 15 years, um, without doing a roof coating type of product, that, that could potentially extend the life or help protect, uh, uh, the roof, um, you know, that's a, that's a huge cost savings. 

Chip Case: Uh, if, if, if we could do what we're doing, continue doing what we're doing without any cancellation, um, of policies, um or not rewriting policies or anything along those lines. And so what you have here basically is about an eight page, and it's in bill form, uh, but bill form is the same thing as state statute, um, uh, uh or state or an amendment form that we would be adding state statute. So you have an eight page bill, basically. And what I've asked for Megan to do is basically just put up for you the language, uh, that has, uh, changes in it. And so anything that's underlined, uh, so let, lemme back up. Everything you see in front of you is currently in state statute, if it is just worded the way that you see it, everything that is underlined is, is new language that we're asking for them to consider and add into the bill. 

Chip Case: And things that are, that are stricken with a line through it, those are state statute language that's currently in state statute that we're asking them to remove, uh, from state statute. And so as you go through that, you can basically see what the main issues are. There will be a couple changes that are still coming, which will be a definition of a certified, uh, roof inspector. Um, that will, will, that will tailor it more to it being an honest broker for a roof inspection. Meaning that if it's, if it's somebody that wants to put a new roof on there and that's your roof inspector, then and they work for the company that builds the new roof, then they're gonna say, Hey, you don't wanna do a coating or this coating or this covering isn't gonna work. And, and they would rather replace the entire roof. 

Chip Case: Uh, so that is one, one, uh, change that is not currently in this language that we're gonna be adding to the language. The second thing is the definition of what a, what a what a slope roof is, uh, a low slope or steep slope roof in there. And so, um, if, if, uh, if anyone would like to see the, the, the adjusted once we add in the roof inspector language, we can go ahead and probably forward that to you guys, um, yep. Next couple days, uh, so that everybody on the phone call can see what we're doing here in Florida with all those types of changes. And so, currently, you know, Florida, I don't know how many people on the phone call know the political climate here in Florida, but, uh, um, there was a special session that was called by Governor Ron DeSantis, uh, to deal some of these issues and immigration bill and and some other stuff. 

Chip Case: The legislature, uh, felt that the immigration stuff was probably something they needed to deal with right away. They dealt with that during special session. The legislature did not wanna deal with any of the, uh, insurance citizens, uh, uh, you know, wind damage, uh, type of legislation for condos, commercial buildings, uh or residential, um, during a special session. So there's approximately right now 11 bills that are working its way through the legislative process. The legislative process here in Florida lasts for nine weeks. Next week is gonna be week four. Um, so currently we still have six weeks left. Um, uh, uh, after next week, we'll only have five weeks left. And, um, there's a lot of different bills that we could amend this language on to. Um, the trick is trying to identify one or two of these bills that are going to be the bills that are actually going to pass the way that legislation passes, uh, in every state. 

Chip Case: But, you know, here in Florida is the house and the Senate have to agree on the language. They have to pass the same bill, it has to say exactly the same type of thing. And then from there, we go to the governor's office for him to either veto the bill or for him to sign the bill. Um, the bill can become law without his signature, but it has to sit on his desk, I think for 14 days. Something along those lines. Um, and so, you know, our, our goal right now is to basically chat with everybody that has, uh, their fingers in the middle of this insurance condo, windstorm, um, uh, Florida Citizens Insurance Pie. And, uh and so we'll be doing some meetings next week where, um, I'm requesting about 15 meetings. I expect to probably get somewhere between seven to eight. One of those key meetings will be the Senate president, uh, uh, who lives in the Tampa Bay area. 

Chip Case: Uh, and, um, uh, his is, has, has to deal with this, uh, locally, um, understands this issue locally. And, um, uh, he's gonna probably help us identify the proper vehicle where this is gonna go. Typically, what will happen is if there's not a specific bill that will pass that we would get amended onto, um, they may end up doing what is called a committee bill, which can come out the last two, three weeks of session where they're going to take the best policy ideas, the best, the best, uh, uh, changes to state statute and fold, take that from those separate 11 bills and create a committee bill that will have that stuff in there. So a big part of what we're trying to do is we're trying to be part of the discussion, educate people, notify them about what's going on and not just about, um, uh, the legislation change that we want and how we think it's gonna be good for the consumers of the state of Florida. 

Chip Case: But, um, uh, more importantly, uh, because here in Florida, we have a very business driven, um, uh, conservative, um, uh, type of legislature. Uh, currently their Republicans control the house, the Senate, every statewide elected office, um and also the governor's mansion. Um, and so and we also have a, a, uh, a a a majority of our congressional delegation is also Republican. Uh, so, um, the business business interest, business size, amount of revenue you generate, uh, the amount of employees you have, those are all things that a, that the legislature's gonna tune into, especially if we're talking about Citizens Insurance. Uh, basically saying that you can't use these products or we're, we're gonna deny your claims, we're not gonna write your policy if, if, if you use these types of products. Um, that would be a huge impact for, um, local state representatives, uh, state senators, uh, for those businesses, for those employees. 

Chip Case: And so that, that's the crux of our argument is not just, Hey, this is the right thing to do. We're lumped in with the steep slope, asphalt shingle residential stuff, so we need to be separated, but also for jobs in the economy, we need to do this fix so that these individuals, these these major players that are generating somewhere between, you know, I think, I think we were looking at the list. I mean, like just here in Florida, I think, I think we're generating close to like $700 million, you know, for, for, for, you know, the state of Florida, uh, uh, just in revenue. And then you can, you can extrapolate from that what the tax revenue would be, uh, uh and then those employees that are employed, I think we have almost 900 employees, uh, through different, different members of this association, different companies, different different products and that type of thing. 

Chip Case: But they belong to this association. So when you talk about those raw numbers, that is a real driver for, um, the business community and us doing a fix, uh, for, for the constituencies. And look, many of these individuals that are affected, a, a lot of their constituents are senior citizens that live, uh, throughout the state of Florida in a, a low slope flat roof, uh, condo. Um and, you know, these are individuals that have worked their entire life either here in Florida or somewhere else. Retired to Florida, came to Florida, they live on a fixed income. Uh, and these special assessments are the type of thing that are, that are gonna affect, you know, what they buy at the grocery store type of stuff, whether they're gonna get their car repaired, whether they're gonna be able to pay, uh, uh, for prescription drugs, that type of thing. 

Chip Case: And so all of that is connected and tied to what we're, uh, trying to do, uh, here in Florida. And so that's, that's, that's what the legislation does and that's pretty much the arguments we're making, uh and whether citizens really wants to be helpful to us or not. And I still believe that there's some confusion with citizens, and we've been trying to work with them. We, we did do a Zoom call. We have, uh, I, I, I know the CEO of citizens personally, I still think there's some confusion on their end about what our product is compared to, uh, uh, you know, the spray on type of stuff for, that you see on Fox News, uh, for the steep slope, uh, asphalt shingle, uh, guys and why we shouldn't be in that, um, arena at all. But, uh, that's, that's, that's kind of the soup and nuts of it and if we can get the legislature to be helpful to us, uh, then citizens is gonna have to do it or they'll come along. 

Chip Case: Um, and we've also met with, uh, the insurance office, the CFO office here in Florida. Chief Financial Officer is, uh, one of the, uh, three people that sit on, uh, the board of insurance here in Florida, uh, for the Department of Insurance. And, um, uh, they're, they're, they're probably a little bit more helpful, uh, trying to be helpful. Uh, they obviously, uh, that's a statewide elected office. So the CFO obviously understands, you know, all of the arguments as it relates to the business and the constituency and that type of thing. Citizens Insurance is, is, as we have, you know, described it, it's a state funded, state built insurance company. Their goal is obviously to remain solvent and to, to, to either be the insurer carrier of Lash Resort or be the insurance carrier that doesn't want to cover additional payments for insurance or increase coverage at all. Um, even though there are other companies, other major insurance companies, whether it be commercial or private, um, uh, uh, meaning residential type of, uh, that, that do do insurance and do cover us, uh, you know, the goal is to get citizens to understand that, that we, we, you don't have to, you know, cancel us or, uh, not write policies with our product, um, because other people already do it. 

Megan Ellsworth: Yeah, absolutely. Well, thank you Chip for that. I, I've, there's so much going on in the chat, lots of people reading through the document and have a lot of questions. So, um, I'd love to, before we get to some of the questions, just read some of the comments. Liquid Applied Roofing has seen impressive growth, growth in the past years, especially due to uncertainty around the economy, allowing greater use of it will be a good thing. It is the cheapest roofing product out there, and it is very effective. That was Lily Smith from, um, Principia. Um, and then lots of greetings, um, from around Florida. So glad everyone's here, C one will make a big difference. Um, and then we, we do have a question. So from Jeff Harvey in C two, who would be the authorized inspector? Is it the public adjuster, the roofing contractor, a roof consultant or a manufacturer's representative? Or would it be a culmination of parties listed above? 

Chip Case: John, I think you would be best since you do the training on that. I think, John, you would be the best to answer that. 

John Hall: Yeah, no problem. Uh, you know, yes, some combination thereof. Um, you know, allowing engineers, uh, to some degree licensed roofers, as long as we we're careful about and Chip mentioned, as long as we're careful about, um, kind of agendas, if you will. Um, roof consultants, definitely. I mean, roof consultants are really one of the true third parties that, um, that can go in with a non-biased and scientific approach and can, you know, do the due diligence. So that's, that's always my, my lead recommendation. 

Megan Ellsworth: Yeah. Kind of going off of that, I'm gonna jump around our questions here. What role do consultants play in determining the condition of a roof and how, um, can we standardize the process to prevent these unnecessary denials? 

John Hall: You know, the consulting world, uh, accredited consultants from IEC, um and I see Chris's, um, comment there. He's absolutely right. Um, yeah, there, there's, um, you know, there's a process of due diligence where, you know, you're obviously visually inspecting the roofs for physical damage, which as I mentioned when I was describing the roof assemblies, you know, you're only looking at the surface, the wear surface. We're not looking at how the roof's attached any moisture content, any deterioration of materials, any potential mold growth in there because of moisture intrusion, um, edge details. So, you know, a roof consultant will need to go in at, at a high level, but have a very strict due diligence process that not only includes, you know, I, I do a lot of training on this and and we talk about our most important tool is our eyes. You know, we have to use our eyes, right? 

John Hall: But there are other, there there's other technology out there that we have to use from moisture meters to intrusive testing. So, you know, we, we, we do have, um, you know, a a lot of people have defaulted to drone infrared drones and that seems to be, you know, kind of the buzz that everybody uses. But with that, we've got to do and a consultant will do this, you know, have to have destructive testing because, you know, we have a lot of comparative, uh, uh, tests and and methods of measuring moisture and issues. But if we don't do some destructive testing and get some, some hardcore numbers, then, then that's all just kind of throwing darts and, you know, so, so that's where a roof consultant will come in, um and go through the full gamut of, instead of just, you know, uh, popping their head up on the roof and looking around and saying, yep, it's toast or, you know, no, it's, it's not, um, just based on the surface wear. 

John Hall: Um, we need to, we need to take a deeper dive and perform due diligence and that's where roof consultant will come in. Um, and roof consultants are specialists in the roofing world. They understand roofing assemblies. They understand, you know, the, the risks associated with, you know, an edge failure and things like that where, um, some of your, you know, I'm not saying others aren't, um, but there's, you know, other, other people might be a little more generalist. I mean, we're not typically focused on the interior, not electrical, things like that. We're an adjuster or a home inspector, you know, they, they're not, they're more generalists and not specialists like a roof consultant would be. 

Megan Ellsworth: Right. Okay. Thank you. Thank you, John. Okay. Josh, I'd, I'd like to, we all know the answer to this question, but let's talk about it. Um, what does this push for tear offs at 15 years mean for the future of roof restoration? 

Josh Poole: Yeah. Um, essentially it, it eliminates the option of re restoration for homeowners. And 

Josh Poole: It, it's really a shame because it, it's a way and means valid way means of extending the life of the roof. They could do that typically at a third to a half of the cost of a replacement. And because of the way that the legislation's written right now, homeowners are now required to absorb the high cost of removing and replacing roofs along with the disposal fees, uh, instead of having the option to keep those roofs in place, which are performing well and and doing well to date, um and not having the option to restore 'em. So, uh, I think this has been, you know, brought up a couple of times throughout the call, but it's, you know, really putting unnecessary expenses and financial strains on homeowners and in particular, you know, those seniors who are living on fixed incomes in the state of Florida. 

Josh Poole: Um, you know, if you, you go beyond the financial impacts themselves as well, um, you know, like you said, we're, we're tearing off perfectly good, well performing roofs unnecessarily. Uh, those roofs are going to landfills that are already overcrowded. And, and that's an ongoing problem that we're seeing everywhere and in particular has been a, a very large issue in the state of Florida. So right now it's just, it's, it's really, um, putting homeowners in a position where, uh, they have to take on and incur, uh, you know, the unnecessary costs of either doing a replacement. You know, one thing that we haven't mentioned, there is an option to, to per perhaps get a, a five-year extension on roofs that are, uh, 15 years or older. But again, that comes with homeowners taking on the cost and the hassle to bring out one of these, uh, you know, certified or approved, um, uh, inspectors and and run through that certification process. Uh, and then it, I think it's also important to note that even if they go through that process and they have that certification, the insurance companies still reserve the right to deny coverage or increase premiums in case like that. Right. So it's just, it, it's really a difficult position that the, the residents in the state of Florida have been put in. 

Megan Ellsworth: Yeah. So Chip, we have a question from Joe Sorrentino. Hi, Joe. Um, if all goes to plan, when would you expect this le this legislation to be implemented? Some of these changes that you all are proposing? 

Chip Case: Yeah, so typically, um, uh, what will hap So, you know, I mean, session, uh, is a 60 day legislative, uh, session. The last day of session will be, um, uh, the last, uh, week in May Oh or or the first week in, in May. And so typically what happens is, um, you know, the legislature will go ahead and start sending bills over the next, uh, next two, three months, be sending bills over to the governor for him to sign. They'll actually be sending some bills before the end of session, uh, for him to sign as long as, as well as the state budget. So typically, and how this language is drafted in bill form, uh, to, to, to amend or change state statute, it would be July 1st. And so that is typically what happens, uh, when you're doing new legislation, because we also do a new budget year every July 1st. 

Chip Case: So the way that we do budgeting here in Florida is July 1st is basically the start of the new fiscal year here in the state of Florida. And so they, they try and marry up as many, um, uh, policy ideas, state statutes, bills, things like that. They're gonna be changed and passed, uh, to that July 1st. Occasionally there is, if it's a, if it's a, like a human trafficking type of situation or if it's a special session, um, uh, type of thing that we did here in Florida, you know, with immigration, um, it, it, it will be effective upon, um, the bill being signed by the governor. And so, uh, but that, that's probably one 20th of the time or something like that, that they put that in, uh, to legislation. So I'd expect that it would be July 1st. Uh, that's what we currently have a drafted to and that's and the bill or the committee, any of the 11 bills that are the available vehicles bills that are filed that we might wanna get like amended onto. But the actual committee bill, the package that I think is gonna, uh, pass state of Florida, it'll be July 1st. 

Megan Ellsworth: Okay. Okay. Thank you, chip. 

Chip Case: Yep. 

Megan Ellsworth: Um, so we have some other people out of Florida here. Um, we have Colorado, um, looks like a lot of east coasters. Um, so do you all, how widespread is this issue? Um, are we seeing similar denial cases beyond Florida, such as, you know, New Jersey, I know Colorado with wildfires, there's some, some things being seen here. Do you all know of any other, um, cases outside of Florida? 

Josh Poole: Yeah, so, um, I think just from, uh, you know, the, the, uh, wind issues, uh, we have seen, um, this particular policy, uh, while it hasn't been widespread outside of the state of Florida at this point, we have seen instances where, uh, similar type of positions are being taken by insurance companies outside of the state of Florida at this point. So we have, uh, experienced, uh, um, situations in New Jersey, other coastal areas is where this seems to be, uh, coming up, uh, you know, more and more if, if at all. Um, so I think, you know, part of what we're looking at is can we, um, you know, adjust the policy to where it allows us to go about, uh, making roof recommendations, letting, uh, citizens work with licensed professionals to do, make the right choices for their roofs and keep them performing well. Um, and uh, you know, try to get out ahead of that so that we aren't seeing policies that are, you know, uh, very straightforward and not offering, uh, full compliment of options and viable options to property and homeowners, uh, start spreading outside of, uh, the state of Florida at this point. 

Megan Ellsworth: Okay. 

John Hall: Yeah, I, I'll just dovetail on what Josh said there for just a second. Um, you know, I'm seeing this, I do a lot of work throughout the southeast and even all the way to the West coast and, um, I'm seeing this become a real issue in Louisiana. Um, you know and they've got a, a citizens there as well. Um, so this is, I think, I think that's the next state where we're gonna see a massive problem. Um, and then I've even seen it all the way out to California. I've had several projects in California in the last year and, and kind of seeing that there as well. So, you know, just like Miami-Dade standards are not statutory in the rest of the country, they do kind of set the stage, if you will and I really believe what we do here in Florida could, could set the stage, um, you know, uh, north and west out of Florida, so, 

Megan Ellsworth: Yeah. Wow. Um, okay. Getting a lot of questions in the chat here. Have we heard anything about Texas with this 

John Hall: Kind of same little, little bit on the coastal areas? Yeah, yeah. Especially down in the Big Bend area. 

Megan Ellsworth: Yep. Okay. Um, and then from Vanessa Manz, um, potentially, what would be the consequences you guys would warn other states about when it comes to insurance insurances pulling out of other states in the future? 

Josh Poole: Yeah, so I, I think we've talked a a lot about, you know, high, high level, um, topics here, but actually getting into what is, is actually happening and we'll, you know, stay in the state of Florida here. Um, you know, I, I know we've gathered a number of, uh, experiences that have happened with people that, you know, real people that live in the state that have been affected by this. So, um, you know, I, I'll just share one example. Uh, you know, we had a, uh, 21,000 square foot condo, uh, that was in, in Florida, had a modified bitman roof, uh, on as the original roof, uh, back in February of 2020, uh, Florida licensed roofing contractor went in, was permitted and, uh, restored the roof with a roof coating at that time. And the cost of that project was approximately a hundred thousand dollars in total. 

Josh Poole: Um, in 2024, citizens Insurance, uh, came back and refused to renew the coverage on the facility because the roof was more than 15 years old. Uh, they did not recognize that the roof restoration or the roof coating was, uh, a, a means or a new roof, uh, in essence and and their definition. So, uh, despite going through that, having a, uh, well-performing roof that had no issues, uh, that roof, uh, you know, the, the condo association was forced to tear off and and replace, uh, at a cost of $600,000, um, you know, plus assessment fees and everything else. And, uh, you know, that, that cost the, on average, the homeowner, uh, there within that condo complex, anywhere from 6,000 to $10,000 per homeowner to do this unnecessarily, you know, on a, on a roof that was in place and performing well at the time. Um, that's just one example of a a, a project and a way that, you know, real citizens have been impacted by this. 

Josh Poole: I would say also that in, in states, John mentioned they have a, a citizens type, you know, insurance corporation that's in the state of Louisiana. Um, last year in October, citizens Property insurance, uh, went through a or enacted their depopulation program and that resulted in over 400,000 policies being transferred into the private sector. Um, and the way that that program was implemented and and went about, uh, really the stipulations allowed homeowners to refuse the offer to transfer or the transfer itself if the new policy was 20% more in cost than their current policy that they held through citizens. But in cases where that cost didn't exceed 20%, um, the homeowners had no choice in the matter and essentially that that transfer was made, uh, regardless of, of whether or not they wanted to, uh, stay with citizens or not. So tho those are a couple of ways that, you know or instances that have had real effects on, on, uh, the citizens here in, in the state of Florida. Yeah. John, you've had had, uh, projects and specific situations that, that you've experienced as well. 
 

John Hall: Yeah. If you guys don't mind, I'll take maybe two or three minutes and just share two different examples of, of how this has affected, you know, real people and, you know, citizen residents, uh, financially. So actually today I'm going out to a project and this is one kind of, I guess tentacle or repercussion from, from this, this abrupt change. So I, I've got a, a condo that I'm going out to see that last year, um, just a few months before their renewal, they were told they have to put on a new roof period or they were not gonna get renewed. So they scrambled to, you know, one they hadn't budgeted, they hadn't prepared, they hadn't, you know, didn't have the reserve to do this. So they made a quick assessment, scrambled to get a contractor that could meet the deadline imposed by the insurer, um, to start the roof. 

John Hall: So they start, they, they took low bid, they didn't, you know, didn't get to vet things. They took low bid, they went on, did the project and, um, lo and behold, um, the roof, the new roof was an utter and absolute failure. Um, so now they're spending another million dollars, um, to and another, you know, assessment, 30, $40,000 per resident, um, to put on a new roof that now will, uh, they've got a little time to do their due diligence and whatnot. So, you know, I, I can get into, you know, the, the, the, the workload of contractors in Florida, the backlog, you know, the people that, um, if, if, if the insurer, you know, tells someone they've got, you know, 90 days to get this job started, chances are they're, it is not gonna happen unless it's potentially an underqualified, uh, contractor. So that's, that's one thing. 

John Hall: The other thing is, is last year down in St. Pete, after Helene and Milton blew through, I was hired to do roof assessments on an 18 condo tower property. So it was one property, all the same construction, um, had roofs of varying ages, um, had several roofs that were brand new. The insurance carrier last year told 'em they had to replace those roofs or they would be denied coverage. So they replaced roughly five roofs on the site just a few months before the hurricanes. They had another three or four or five roofs that had been restored with foam and coatings within the last five years. And then they had the rest were, um, typically asphalt roofs. Um, the only roof on the property to fail was one of the new ones, of course, um, the only roof that was blown off was one of the new ones. 

John Hall: Um, and that's largely because, you know, they were forced to tear off a more robust system and they went back with, again, it was unplanned. It was, you know, unbudgeted. So they had to go and, and do what they could afford and they put a lesser or inferior roof that met the insurance qualifications, but did not serve the property owners well, it was, so, you know, those are just a couple of examples of the things I'm seeing on a regular basis that, that really have really dire for, for homeowners and citizens in the state of Florida. And, you know and out of Florida, you know, we see we're seeing this more and more. So, um, those are just a couple of real life case studies that I'm personally involved with right now. 

Megan Ellsworth: Yeah. Wow. We also have, um, a comment from Jim out of Colorado. We work in Colorado and are seeing insurance companies taking longer and fighting harder on roof replacements. The wildfire issue is mostly in the foothills of the mountains. Some of the more aggressive insurance companies are forcing homeowners into a CV policies after 10 years. Commercial deductibles are rising significantly. Um, um and then we have a good question here from Vanessa. Do we believe that citizens or insurance companies are requesting full roof replacements because of a false concept that it's cheaper or less paperwork in the long run? 

Chip Case: Um, I would thi this is Chip. I would, I would, I would say that, uh, citizens insurance obviously is not in the business of, you know, trying to save home, home homeowners or condo owners, um, money. Uh, they're in the business of trying to limit their liability. And so if, if they think that putting a new roof on is going to limit, uh, their potential liability and again, the problem with that is that if you can't afford to put on the proper structural roof, but you're putting on a less quality roof, it is gonna end up costing more. And so I, I think, again, I think there's some confusion with citizens that they don't understand exactly what our product is, what it does, how it can extend a roof, how it can, it can save money. And, um and in many ways with, with, you know, look, I mean, for, for what we have to do in Miami-Dade, the building code in Miami-Dade is the toughest, strongest building code anywhere in the entire nation. 

Chip Case: And if we can get approval, which we do have approval, uh, from those guys, um, that that should be the gold standard. That should be where every insurance company, including citizens, does not have, um, anything to be concerned about. Um, and again, everybody, uh, it depends on the company, it depends on the type of product, but everybody has their own warranty that they apply as well. And that should also be factored in to, to, uh, to, to, to the work that's being done on these roofs, uh, the, these roofs to, to, to extend their life and to help keep the cost down. But their goal is obviously to limit their liability. If you, if it costs you five times, 10 times as much to replace the roof, whatever quality of roof you put on there, uh, in their mind that that's limiting the liability on their side of it versus, um, uh, not understanding what our product is and saving, um, uh, constituents, senior citizens, that on fixed income, um, you know, that's just not their business model. 

Chip Case: And, uh, that's, look, every insurance company except for citizens, 'cause it's a state run type of thing, but every insurance company is a business. They all have a business model. They all have to go to Wall Street every quarter. They have to report for their investors, um, a, a profit if they possibly can, right? And there's nothing wrong with that as long as services are being provided, as long as what you are paying for is actually getting done. And where our product is different is, is kind of a newer technology from the perspective. 20, 34 years ago, this was not something that existed. And so we gotta, we gotta get insurance companies and get, you know, like citizens of Florida up to speed with the technology of what these products are so that they understand that there is a cost savings not only to, to, uh, to the constituency and the senior citizens here in Florida, but a cost savings, uh, uh, to the state of Florida. Um, and insurance companies, because these products are, are, are, are good for, uh, doing just that. 

John Hall: I'm gonna, I'm gonna jump in and echo chip for just a minute in that, you know, I, I don't care what product you take out to a roof, whether it's a, a, a bucket of coating or a roll of membrane. It is a product and it, it is how that roof is evaluated and how that product is installed that makes the difference. Um, and you know, it, there were some cowboys, if you will, some, you know, back years ago that would go out and paint roofs and and there's a difference between painting a roof and restoring a roof. Um, you know, so I think the industry, I know the manufacturers of coatings have gotten more risk averse  and so they're requiring more due diligence on the front end. So, you know, restoration is a process. That process involves evaluation, a little more mitigation of, of problem areas, repairs, even upgrading roofs in some degree. 
 

John Hall: Um, so, you know, uh, I think the insurance companies to some degree have this, this mindset about, well, you know, it's just going out and painting a roof. Well, the, the coating can fail just like a membrane can fail. It, it, it's the process of roof restoration and that's what they've gotta understand. And if that's done, you know, by qualified contractors, there's due diligence, there's oversight, there's all these things, there's maintenance, you know, whether you're coating a roof or storing a roof or installing a new roof, um, there has to be maintenance. I mean, that, that's truly where I see most roofs fail is like a maintenance. It, it, it's not the product that was put on the roof. So, um, so just to kind of echo Chip's case, uh, I, I think there's, there's a little bit of misconception out there, but everybody wants to mitigate their risk, the manufacturers of roofing products as well as the insurers. And I think everybody can get aligned behind mitigating risk and improving the installed product, um, for the ultimate owner of the, the building, the homeowner or the, you know, um, we've just gotta get everybody a little better aligned on that. 
 

Megan Ellsworth: Yeah, I agree. It seems, it seems in the chat too that there's a consensus, there's just a lack of education of what restoration the restoration process looks like. Um, we have some comments in here from Joe. Restoration systems have been in practice since the 1980s. I was involved in my first project, um, in Atlanta in 1985. So there's, there, it's, there's definitely a lack of education. So how do we, how do we as an industry advocate for these clear insurance policies and help educate the, the public and, um, these insurance companies on the power of restoration as a viable and sustainable solution? Chip, maybe you can, how do we, how do we attack this? 

Chip Case: Yeah. And that, and that and that was and that is exactly, uh, when, when I was brought on board, uh, to, uh, uh, you know, be the lobbyist for the association, um, that was one of the things that we focused on, was identifying, um, what the product is, uh, what the products are, uh, what the differences is. Uh, uh, I, I, I've, I've, I've been sent videos of this is how we apply it, this is what it is, this is what it does. Um, definitely when we met with citizens, um, on, on a, on a Zoom call, um, because we had, I think four or five people from our side, they had four or five people from their side and then the c you know, I just, I I, I understood they clearly did not understand what the product was. They didn't understand what makes us different. 

Chip Case: Um, you know, the type of roof coatings we're doing, the type of restoration that, that we're doing, they didn't understand what it was. And, um and so I, it is gonna take a little bit of time, hopefully it, it, you know, I mean, we, that I think the, I think it's gonna be an ongoing process of educating the legislature, educating, uh, insurance companies. I think this is the type of thing that's going to, gonna gonna be a multi-year type of, uh, uh, goal. Um, clearly what we want to do though is we want to get, you know, key leadership in the Florida House and the Florida Senate to go ahead and do a statute change so we can have an effective change right away. And then above and beyond that, continue educating rank and file members of the house and the senate insurance companies, citizen, uh, uh, state employees, you know, like basically, I mean, state, uh, I don't mean to call 'em, you know, like bureaucrats, but people that work in, you know, the bowels of, of, of state government, um, understanding what this technology is, what the product is and that's, that's, that's exactly why you guys belong to this association. 

Chip Case: That's exactly what this association is doing. Uh, they're stepping out and, uh, they are communicating and educating people about, about, uh, about these products and how it's a good thing. And, uh and so I applaud them for that. And, uh, and yeah, but I think it's gonna take more than the next five weeks for us to do a complete education program. We just want to get to those, those key leadership members that are dealing with these insurance issues here in Florida. Uh, quite frankly, a lot of 'em don't like citizens, uh, which helps us out a lot. Um, getting those people to do a statute change so that we can have an effective change going forward. Um, and then as you guys move to other states, they're gonna have to do the same type of thing that, you know, I mean, we're doing here. 

Megan Ellsworth: Yeah, absolutely. So, um, Josh, I know you attend Roofing Day. Um, I don't are you're not going this year, but how can people, how can roofing contractors out there in Florida and other states get involved, um, to help educate the, the people that are in the, in our government? 

Josh Poole: Yeah. Roof. Roof, yeah. And unfortunately, I won't be able to attend Roofing Day, but it is a great event, uh, that's put on annually. Um, as far as, uh, reaching out, you know, in the state of Florida, a absolutely, I think, uh, um, you know, one o obvious way is a, as a resident of Florida, reach out to your representatives, you know, notify 'em of your concerns, uh, of issues that you know or if, if you have been affected by this, how it's affected you. Um, and then contractors and and other industry professionals, I, I'd urge you to, to, you know, look at your industry associations, uh, whether it's the, you know, Florida, uh, roof contractor, sheet metal association, um, uh, you know, there's many others. Arma, uh, RCMA obviously, uh, is a fantastic organization. That's my completely unbiased opinion. Uh, but, uh, you know, o other industry organizations where the, these effects are, are taking place, uh, you know, I, I know there's a number of 'em that have ongoing efforts to, to try to get, you know, policy changes in place, get active with within those organizations, do what you can, um, you know, put, put your work in and and effort and and join that, that voice to, to show that we need change in the way that things are going down here, um, you know, specifically in the state of Florida. 

Josh Poole: So I, I would say that's one definite way that, that especially contractors can get involved, you know, go and and start doing what you can to help support those efforts through associations. 

Megan Ellsworth: Yeah, absolutely. 

Chip Case: Yeah. Let me, let me add this too. You know, I'll, I'll be glad to forward to Megan. Uh, hey, look, uh, all of the contact information, uh, for your State House member and your state senator are on, on on the State's website. What I have is I, is, I have an Excel spreadsheet that I'll forward to her, that she can forward to those people on this call that, that would like to have it. And, and what I have on there is not just, um, uh, the state representative, uh or the State House members email, but I have their legislative staff as well. And typically, those are the people you want, really want, wanna, wanna be emailing and, uh, uh, kind of communicating with, uh, if you, if you send something to your state representative, you're, you're, you're gonna get thrown into a junk folder until they get around to taking a look at it. 

Chip Case: Uh, and if your state house member, state senator, it's not a full-time job, it should be, because if you're doing it well, it is a full-time job, but it's not functioned as a full-time job. It's a part-time job. They only make $27,000 a year. The full-time staff, uh, for, uh, for those members, the aides and those district secretaries, it is a full-time job for them. It is their job to be responsive to the constituency. And, uh and so I'll be glad to send that to her so she can forward that to you guys. And maybe what we'll do is, is also draft, um, not a, not a form letter, but basically draft, Hey, here's the outline of what's going on and I need you to get engaged. Understand this is a problem here in the state of Florida. Um, I do think that's important, but what would be helpful, because if it looks the same every time it's sent out, it looks like a form letter, it's kind of, it's, it's, it, it's gonna be dismissed. 

Chip Case: But we can definitely do a, a, a, a bullet point outline of these are the issues, this is why I need for you to get engaged. But if you have a personal, um, uh, story, if you have a personal issue, if you and this is how this affected me and this is what it cost me, this is what it cost, uh, uh, you know, like my company or or, um, you know, I mean the people that I service, uh, uh, you know, that type of thing. If you can add a personal, um, uh, connotation or, um, uh, story to it, then, then, then it will definitely be read and probably be responded to faster, uh, than, than just that. But that, that is definitely one thing that we can do, um, in a letter or email form. 

Megan Ellsworth: Absolutely. Thank you, chip. I will send all this information out to anyone interested. Just throw your email in the chat if you would like me to send you our resources, the, um, legislative document, um and anything else that Chip provides. Thank you gentlemen, so much. There's still so many questions. Just lightning round really quick. We have four minutes. Um, from John Santoro is the issue with denial of coatings on older roofs that the attachment of the existing roof system can't be validated without extensive testing. Maybe John, you can take that. 

John Hall: Um, that may be a perception, but that shouldn't be the case. Um, it, it, it's pretty easily, it, it, it is pretty easy to test an existing system, even with or without coatings to determine how well it's attached. If there's, you know, starts with good moisture testing, um, you know, if there's, 'cause if there's moisture that's an indicator, there's other issues, so. 

Megan Ellsworth: Got it. Okay. Last question from anonymous attendee <laugh>. Has there been any differentiation from insurance companies or legislators of restoring metal roofs as compared to low slope products? 

John Hall: I haven't seen the, um, requirements being enforced on metal as much as low slope. Okay. I mean, I, I've seen 'em allow more restoration of metal. 

Megan Ellsworth: Okay. That's awesome. Um, well I think that's all of our q and A questions. Um, thank you gentlemen so much for chatting with me today and just providing really great information and wisdom to everyone here. Um, again, everyone in the chat, send your email if you would like more information after this, this will be up within 24 to 48 hours on coatings coffee shop.com so you can watch it back, take notes, send it to your colleagues. Thank you APAC for, um, sponsoring and also RCMA for helping put this panel together. Um, I just wanna let everyone know that next week on roofers coffee shop.com, we're gonna be talking about steel tariffs with, um, Sherwin Williams and how that's affecting the industry. So it's gonna be really hot topic, obviously just like this one. That's what we're all about here at the coffee shop. So I hope to see you all there. Please go to coatings coffee shop.com to learn more, or roofers coffee shop.com to learn more there as well. Um, thank you gentlemen so much. This has been amazing. 

Josh Poole: Oh, thank you for having us. Thank 

Megan Ellsworth: You. 

Josh Poole: Absolutely. 

Megan Ellsworth: Yeah. Um, alright everyone, we'll see you next time on the next Coffee Conversation. See ya.