Kentucky Clarifies Matching Law While Florida Insurers Use Endorsements to Limit Replacement Costs

November 6, 2023

Matching requirements for roofs and interior furnishings have been a tough issue in the property insurance industry for years. Recent developments show how insurers and regulators in different Southeast states are managing the mandates.

In Kentucky, the state Department of Insurance in October posted an advisory opinion, clarifying the intent of the state’s matching statute. On the one hand, Kentucky law does not permit a “line of sight” rule for roofs: “If the shingles on one slant of a residential roof must be replaced due to damage covered by an applicable property insurance policy, and absent the availability of matching shingles that would render the slant in question reasonably uniform to the remainder of the roof, then an entirely new roof must be installed,” state Insurance Commissioner Sharon Clark wrote in her Oct. 17 bulletin.

On the other hand, though, as long as replacement shingles are of the same make and model, even if the color won’t quite match the older shingles due to age and fading, a full roof replacement is not necessary, Clark noted.

In Florida, where insurers have blamed a cottage industry of roof scams for helping to implode the insurance industry, several carriers are now relying on newly accepted endorsements to limit what they will pay to match non-damaged materials.

The Florida Office of Insurance Regulation in recent months has approved policy forms filed by eight property insurers, which limit the amount the carriers will pay to replace undamaged materials to create a matching, uniform appearance after repairs, state records show.

Olympus Insurance Co. was one of the first to try the endorsements. It filed suit against OIR in 2021 after regulators disapproved a policy form that would have limited payouts for matching materials.

Since then, OIR has approved policy forms submitted by Monarch National Insurance Co., Universal North America Insurance Co., Florida Peninsula Insurance Co., Century National Insurance Co., Edison Insurance Co., Kin Insurance Network, Spinnaker Insurance Co. and American Integrity Insurance Co. of Florida. All of them cap the amount the carriers will pay to match materials to 1% of the limit of the policy to replacement of the primary structure.