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It is Getting Expensive for Citizens to Continue to Deny Insurance Claims

attorney fees.jpgCitizens Property Insurance continues to seek significant increase in their rates on a year by year basis. This causes many to ask the question, “where is all this money going.” Many believe that one of the causes of these annual rate increases is the amount of attorney’s fees Citizens pays each month. Citizen is said to be paying out an estimated $2 million in attorneys’ fees each and every month.

From the beginning of 2011 until about June of 2013, Citizens has spent more than $16 million in lawyers from over 150 firms that have litigated claims on behalf of Citizens’ policyholders. The figure above does not even take into consideration the amount of money Citizens’ spends defending the claims held by various policyholders.

These widespread costs could be reduced if Citizens decided to simply stop denying so many claims and allow more claims to go to mediation.

Policyholders are being subjected to Citizens tactics of rejecting claims and choosing to battle the disputes in court. A Citizens representative says that a large majority of the claims made to Citizens are claims alleging water loss, which are largely denied because Citizens only covers sudden and accidental water damage, not long-term leakage. This is just one of Citizens many defenses as to the number of claims that end up in litigation.

Citizens’ also decides what should be appraised and not the policyholder, which allows Citizens to pick and choose what they are going to be responsible for. Policyholders and their attorneys believe that having the appraisal agreement, where they could choose a third party appraiser would be a lot more efficient. These same people believe that Citizens current policies are being abused by law firms and vendors working for Citizens.

This is a continually evolving problem for the insurance company that insures nearly one-fourth of the property insurance market in the state of Florida. They are known for denying delaying and defending because they can essentially pay out whatever they want to pay. Citizens is continuing to lowball its policyholders because they are a quasi-public corporation, which is not subjected to the laws of bad-faith like those that apply to private insurers.

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