If there is one hot topic in Florida right now, it involves Citizens Property Insurance Corporation and the actions it is taking concerning future insurance coverage for Floridians. At the Citizens Board of Directors meeting earlier this week, board members voted in favor of less insurance coverage while also approving higher deductibles. Sun-Sentinel Pulitzer Prize winning journalist, Julie Patel, reported on the outcome of the voting in her article, “Citizens insurance panel approves higher deductibles, less coverage.”
Ms. Patel also published data on the current claims situation at Citizens Property Insurance Corporation. Frequent readers of this blog and every public adjuster in Florida should be familiar with a part of Florida law that went into effect on May 17, 2011, placing restrictions on how public insurance adjusters are paid for Citizens Insurance claims. The substantive restriction regarding public adjuster assistance in Florida Statute Section 627.351(6) reads:
For any claim filed under any policy of the [Citizens Property Insurance] corporation, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value greater than 10 percent of the additional amount actually paid over the amount that was originally offered by the corporation for any one claim.
In May 2011, Chip Merlin posted details about the law change in, Public Adjusters Are Restrained From Citizens Claim Work, and stated that this law, as written, is an unreasonable restraint on trade. By targeting the commissions of public adjusters, Citizens was obviously looking to decrease claim payouts to policyholders. But new data from Citizens shows Floridians are still seeking to have their claims honored and paid in full.
Take a look at the numbers and stats:
Legal and other costs to investigate and fight claims increased 12 percent to an average $12,549 per claim from last year. That’s largely due to the $119,211 average cost per commercial claim because Citizens paid costs associated with closing several large commercial claims.
New claims so far this year increased 5.4 percent since last year.
There are less complaints: 76 complaints for every 10,000 claims for the 12 months through May, which is the lowest recorded since January 2009. The ratio for May, 65 complaints for every 10,000, is a record low.
There were 3,089 claims for Tropical Storm Debby near Florida’s Panhandle and 265 claims for Tropical Storm Beryl near Jacksonville.
New sinkhole claims decreased but lawsuits over sinkholes increased. The claims decreased 20 percent this year since the same period last year because some customers no longer have the coverage. The lawsuits increased 153 percent to 571, driven largely by Citizens only offering to pay the value of property for sinkhole claims instead of the higher rebuilding and stabilization cost, as directed by a 2010 law, according to Citizens.
While it is unknown what the future will hold for Citizens Property Insurance Corporation, it is important for policyholders to be educated and informed not only when it comes to disputing a claim payment but also concerning coverage within the policies.