In the legal profession we sometimes use the term “res ipsa loquitur”—Latin for "the thing speaks for itself." With that in mind, take a look at the article, All’s fair? Scott Link changes sides after $5M Citizens superlawyer pay,1 discussing the fact that the top lawyer for Citizens is leaving to represent policyholders.
I was surprised when I first saw the Sun-Sentinel article, Citizens files request for 72-hour deadline to report loss. The more I read and thought about the article the angrier I became. As I have written in the past, Florida policyholders continue to pay the highest property insurance rates in the country despite the fact that no serious hurricane has hit the state in years.1
Citizens Property Insurance Company should devote more time and resources to education, training, and properly and promptly handling property insurance damage claims instead of hiring teams of lawyers “experts”. Citizens wants to avoid paying for covered damages in the homeowners policies by any means necessary. In related news, for three years, Citizens has been depopulating. Sending and shipping off the policyholders to other “brand new” and “financially new” insurance companies so it won’t be so exposed to so many homes when a hurricane hits. But now Citizens says it doesn’t have enough money in the bank and it is raising rates again.
I came across the article below and was pleasantly surprised by the contents. As you can see, Citizens has reworded and toned down their “opt out” letters to consumers. “Opt out” letters are sent to current Citizens policyholders and strongly encourage those policyholders to go to another (private) carrier. Unfortunately, these letters are confusing and contain such threatening language that consumers are left wondering about the best course of action. I applaud Citizens for trying to improve this aspect of their operations.
It is unclear why the Office of Insurance Regulation has approved a rate hike for Florida homeowners insured with Citizens Property Insurance Corporation. But it is clear that the policy coverage that was once offered by Florida’s insurance company was been eroded. Coverages in each policy issued by Citizens has been lessened in almost every renewal. Sinkhole coverage, carports, water damage, tile damage, and other provisions have been re-written to benefit the carrier. Yet, rates are going to increase.
If you happen to be at or near the Florida Senate Office Building at the State Capitol Building this morning, the Florida Office of Insurance Regulation (FOIR) is conducting a public hearing in Room 401 at 9:00 AM to discuss Citizens’ proposed 2016 rate changes. Whether the rate increases or decrease, the proposed changes would have a direct impact on premiums paid by those insured under a Citizens commercial property, homeowners, or mobile home policy. This is a unique opportunity to not only listen to what State officials and Citizens spokespeople have to say about the state-wide proposed rate changes, which would become effective on February 1, 2016, but also a chance for those who would be affected to share their own thoughts and any concerns.
A dozen insurance companies have fled or failed Florida during the last ten years. Twelve insurance companies could not stay in business here and we haven’t suffered a catastrophe since Hurricane Wilma in October of 2005.
A little over seven months have passed since the Supreme Court of Florida heard oral arguments from the attorneys for Citizens Property Insurance Corporation and Perdido Condominium Association. For those readers who are not familiar with what lead to the issue coming before the state’s supreme court, the case stems from a decision by Florida’s First District Court of Appeal in Perdido Sun Condominium Association v. Citizens Property Insurance Corporation,1 where the appellate court held that the “willful tort” statutory exception to Citizens’ immunity applied to statutory first-party bad faith claims. In the opinion, the First DCA also certified the following question to be "of great public importance":
Whether the immunity of Citizens Property Insurance Corporation, as provided in Section 627.351(6)(s), Florida Statutes, shields the corporation from suit under the cause of action created by Section 624.155(1)(b), Florida Statutes[,] for not attempting in good faith to settle claims?
Hurricane season just ended in Florida without any significant storm landing on our shores. As noted in Slow hurricane season could spell relief for Citizens Property Insurance policyholders,11 the 9-year break from storms should have stabilized the property insurance market and led to reduced premiums for policyholders. Unfortunately, the reality is a bit different. The article is correct in pointing out that Citizens Property Insurance Company has been able to reduce its exposure by transitioning its policies into the private market. However, this effort by Citizens to shed policies is a result of recent and concerted efforts by the legislature and Citizens to address the number of policies in its portfolio. In fact, Citizens reached a peak of 1.5 million policyholders in August of 2012. Thus, I believe the Citizens’ declining policy count is more a result of recent legislation and efforts as opposed to the 9-year break from storms. It should also be noted that there is significant debate about whether Citizens should be transitioning its policies to “take out” companies with unproven financial and customer service track records. We can talk more about that debate in another blog.
Another 182,000 insurance policies have been approved by the Florida Office of Insurance Regulation (“OIR”) to be transferred to private insurers, (commonly referred to as “takeout” companies), in 2015 as part of the state’s ongoing effort to reduce the number of policies handled by Citizens Property Insurance Corporation. While it is unlikely that all will be assumed from Citizens, (according to the OIR, about 127,550 of the 1.1 million policies approved last year were transferred), the effect of the mass assumption on Florida policyholders should not be overlooked.