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Citizens reverses course on strict home valuation system

Just days after a Tampa Bay Times story about seemingly high “replacement value” costs placed on homes by Citizens Property Insurance Corp., the state-run insurer is reversing course on its strict valuation process.

Last year, Citizens told agents it would rely solely on its 360Value software for estimating the replacement cost of homes, sparking several complaints from homeowners who said their homes were being overvalued by the software.

In a Friday announcement, CEO Richard Wallace said Citizens will once again take into account several different valuation methods, including:

- Replacement (reconstruction) cost estimates generated by 360Value®, MSB® or e2Value®;

- An insurance reconstruction cost valuation prepared by a licensed appraiser which is specifically formulated to establish the insurance reconstruction cost rather than market value;

- Reconstruction cost estimates prepared by licensed general contractors, architects or engineers which include a contract price for reconstruction cost and an itemized list of the home's features; and

- A Property Inspection Report dated within the past 12 months ordered by another property insurance company that includes a detailed reconstruction cost estimate.

Said Wallace:

"For most Floridians, their home is their most valuable asset. Our policyholders need to make sure that they can repair or replace their homes in the event of a catastrophic loss. It is important to provide our customers with a range of reconstruction cost options when determining insured value." 

Here's the release:

Citizens to Provide Additional Options for Property Valuation

FOR IMMEDIATE RELEASE

JANUARY 20, 2012

TALLAHASSEE, FL - In response to concerns raised by policyholders about Citizens replacement cost valuation process, a review was conducted this month and it was determined that it is in the best interest of Citizens and our policyholders to accept additional valuation methods.

"For most Floridians, their home is their most valuable asset. Our policyholders need to make sure that they can repair or replace their homes in the event of a catastrophic loss. It is important to provide our customers with a range of reconstruction cost options when determining insured value," said Scott Wallace, Citizens' President/CEO and Executive Director.

Citizens utilizes 360Value® , a nationally recognized replacement cost valuation system to establish appropriate coverage amounts for our customers. 360Value® and other reconstruction value methodologies are not likely to address the disparity between the cost to reconstruct a home and current real estate market values. However, they are our best tool to estimate reconstruction costs. 

Accordingly, Citizens will consider a range of reconstruction based options to determine insurance values as follows: 

- Replacement (reconstruction) cost estimates generated by 360Value®, MSB® or e2Value®;

- An insurance reconstruction cost valuation prepared by a licensed appraiser which is specifically formulated to establish the insurance reconstruction cost rather than market value;

- Reconstruction cost estimates prepared by licensed general contractors, architects or engineers which include a contract price for reconstruction cost and an itemized list of the home's features; and

- A Property Inspection Report dated within the past 12 months ordered by another property insurance company that includes a detailed reconstruction cost estimate.

"We believe that providing these options gives our policyholders and agents more confidence in the valuation process while providing policyholders with adequate protection for their homes," Wallace said.

 

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