Yet Another Citizens Insurance Scandal and What You Can Do About It

If you believe what you read in the papers about our state’s biggest property insurer, you may be anxiously gleaning the “A-Section” wondering “could it get any worse?” After all, we’re barely into 2013 and Citizens has already managed to pull off a spectacular hat trick of newsworthy scandals including: the “Travel Gone Wild” fiasco where company executives rang up extraordinary travel expenses for deluxe accommodations; followed by claims of sexual impropriety, payoffs and cover-ups and then finally, just when we thought their Office of Corporate Integrity was on the path to cleaning up this mess by issuing a blistering 73-page investigative report, Citizens went and terminated the investigators, revised the report and quickly shut down the department. Mind you, all the while, as we speak, a Citizen’s lobbying force is in Tallahassee urging our leaders that Citizens desperately needs to raise your rates.

Remember, I started by suggesting that at least it couldn’t get any worse. Well, it does. Meet Scandal #4. But at least this time there may be something you can do about it. It has to do with how Citizens figures the cost for replacing a destroyed home – and hence the cost of your insurance. Lawyers have sued Citizens claiming that the software used to dictate how much coverage you must buy grossly overinflates home replacement value. So for example, an insured may have a home that per the contractor would cost $250,000 to rebuild, but in today’s down market is only worth $200,000. Lawyers assert that Citizens’ software will value the home at as much as double the home market value, forcing the consumer to purchase far more in coverage than the home’s value. Add to that, charges by lawyers, that Citizens uses software giving much lower valuations when it actually adjusts claim losses for payment and you have the makings of another ugly trick on the Citizens’ scandal list.

So remember I said Joe Consumer may actually be able to do something about this? Well you can. While not widely publicized, Citizens will refund some overpayments where an approved independent appraisal shows that Citizens’ valuation is incorrect. If you think you overpaid, the best way to start is to get a home replacement, cost appraisal and talk to your agent. You may find that some of that money that might otherwise have gone to the Ritz, may be coming back to you.

Russel Lazega is an attorney and author of several of Florida’s most widely distributed legal textbooks on Florida Insurance Law: West’s Florida Practice Series Volume 7 and West’s Florida Insurance Law & Practice. Mr. Lazega represents accident victims, insurance policyholders and condominium associations and is based in Dania Beach, Tallahassee, North Miami, Orlando and Tampa, Florida. Contact:

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