Is Citizens Insurance the Villain Or Florida Laws

Florida’s state-run Citizens Insurance has gained notoriety for its dismal claims payment record. According to data from insurance industry reports, more than half of Citizens’ claims in 2023 went unpaid, marking the worst claims pay rate in Florida. The findings underscore the growing concerns surrounding Citizens’ practices, leaving policyholders struggling during times of crisis.

Citizens Insurance: The Worst Claims Pay Rate in Florida

A Troubling Statistic

Citizens Property Insurance, Florida’s insurer of last resort, closed over 15,000 claims in 2023 without paying policyholders. These unpaid claims made up more than half of all claims filed with Citizens last year.

Jill, a Tampa homeowner, filed a claim after her home suffered hurricane damage. She was shocked when her claim was denied outright, even though the damage seemed extensive. Citizens cited her deductible as the reason, but Jill felt the damage was undervalued.

Hurricane Deductibles Are Too High

Citizens’ policies carry hurricane deductibles based on a percentage of the home’s value, which Citizens itself determines. These deductibles are often much higher than necessary, leaving homeowners responsible for thousands of dollars before insurance kicks in. Don, another policyholder, found out that his deductible of 10% on his $400,000 home meant he had to pay $40,000 out-of-pocket before Citizens would pay anything.

Citizens Versus Private Insurers

How Citizens Compares

Citizens denied claims at a higher rate than private insurers like State Farm and Allstate. While private insurers closed claims without payment just over 40% of the time, Citizens’ rate exceeded 50%.

According to Insurance Direct Rates (IDR), this trend is alarming, especially since Florida policyholders already had the worst chance in the nation of receiving claim payments in 2023. Sean, an insurance expert at IDR, remarked, “For Citizens to be at the top of the denial range is very troubling.”

Key Reasons Claims Go Unpaid

Flooding Exclusions

Citizens frequently denies claims by attributing damages to flooding, which isn’t covered under their policies. In fact, 30% of claims after Hurricane Helene were denied for this reason. Gary, who lives in a flood-prone area, had his claim denied even though the damage was caused by wind-driven rain.

High Deductibles

Even when Citizens accepts a claim, many homeowners don’t receive payments because their damages are below the deductible threshold. For example, windstorm deductibles can reach 10% of the home’s replacement value, which Citizens inflates.

Lack of Transparency

What’s even more concerning is that Citizens doesn’t track the specific reasons for denied claims, leaving homeowners in the dark. This lack of accountability highlights systemic issues that need immediate attention.

Rate Increases and Policy Changes

Aggressive Rate Hikes

Despite denying so many claims, Citizens remains profitable, reporting a net income of $746.5 million last year. The company has implemented double-digit rate increases over the last few years, with a proposed hike of over 10% for 2024.

Policy Shedding

Citizens has also reduced its number of policies, dropping from 1.4 million policies at its peak to around 1 million today. This is part of an effort to transfer customers to private insurers, who often charge higher premiums.

Legal and Legislative Challenges

Harder to Sue

Suing Citizens has become increasingly difficult. Since 2023, claims disputes are handled by administrative law judges appointed by Governor Ron DeSantis and the state Cabinet. Hundreds of cases have been filed, but the new system makes it harder for policyholders to win.

Jill tried to sue Citizens for denying her claim but found the new legal process nearly impossible to navigate. She felt the system was designed to protect the company rather than the consumer.

Bad Faith Immunity

Unlike private insurers, Citizens is immune from bad faith lawsuits, which typically hold insurers accountable for unfair treatment. Without this layer of scrutiny, Citizens lacks the incentive to act in good faith, leaving policyholders vulnerable.

Citizens Insurance and Hurricane Debby

During Hurricane Debby, Citizens closed 77% of claims without payment, a statistic that shocked many. Sean pointed out that this rate is unacceptable for a state-run insurer meant to protect homeowners in emergencies.

The trend mirrors Citizens’ actions over the last five years, where the rate of claims closed without payment has ranged between 39% and 51%.

Insurance Direct Rates: A Valuable Resource for Policyholders

Navigating Florida’s complex insurance market can be overwhelming. Insurance Direct Rates (IDR) simplifies the process by offering educational resources and tools to compare rates. Don used IDR to find a private insurer that better suited his needs after his frustrating experience with Citizens.

Visit Insurance Direct Rates to compare quotes, understand your options, and ensure you’re getting the best coverage for your home.

Citizens Insurance vs. Private Insurers: Pros and Cons

The Need for a Thorough Investigation On Citizens Insurance

The alarming statistics surrounding Citizens Insurance demand a thorough investigation. With its high denial rates, lack of transparency, and limited accountability, Floridians deserve better protection from their state-run insurer.

State Representative Hillary Cassel has emphasized the need for reform, pointing out the lack of incentives for Citizens to treat customers fairly. Without changes, Citizens will continue setting a troubling precedent for other insurers in Florida.

Protecting Your Home with the Right Coverage

As Florida’s insurer of last resort, Citizens Insurance is failing its policyholders when they need it most. With high rates of denied claims, inflated deductibles, and limited accountability, homeowners are left vulnerable after disasters.

For homeowners like Jill and Don, seeking alternatives is essential. Using resources like Insurance Direct Rates, Floridians can find better coverage and educate themselves on navigating the insurance landscape.

Don’t leave your home unprotected—compare your options today! Visit Insurance Direct Rates to secure the best coverage for your needs.