March 17, 2014

As Citizens' lawsuits mount, company tries new tactics in court and legislature

Citizens Property Insurance has a lawsuit problem.

More than 12,000 policy holders have sued the company in an effort to get their outstanding claims paid and, new data shows, the defense costs are rising — with the company billed more than $21 million for the last three months of 2013 alone.

Some of the longest-fought battles are in sinkhole alley — the section of the state that includes Hillsborough, Hernando and Pasco counties, which rest on a porous, cavity-prone limestone bed. The amount the agency spends on sinkhole litigation alone has has doubled — from an average per month expenditure of $944,345 for 2012 to $2,050,106 for 2013, according to data provided to state Rep. Frank Artiles, R-Miami, last week,.

As more than 2,100 homeowners have filed lawsuits for sinkhole damage reported more than two years ago, the legal costs of those claims are now costing

Citizens more than $4.4 million a month, or about $2,100 per sinkhole claim.

To deal with the mounting lawsuits, Citizens is fighting in the courtroom and at the capitol: Read more here.

 

March 12, 2014

Citizens settles 300 disputed sinkhole claims but hundreds more remain

About 300 homeowners have agreed to settle their disputed sinkhole claims with Citizens Property Insurance, the company announced Wednesday, leaving an estimated 1,800 more lawsuits still unresolved.

The group settlement involves policyholders who were challenging the state-run insurance company for failing to agree to the method and cost of repair for sinkhole damage to their homes.

The company has watched as lawsuits have ballooned in recent years as most homeowners were challenging Citizens for forcing them to repair their homes by putting grout in the ground instead of underpinning their homes with steel beams, or both.

The policies included in the settlement were all represented by the Clermont law firm of Boyette, Cummins and Nailos. The cost to Citizens for making the repairs have not yet been determined but the avoided legal fees and streamlined repair procedure is expected to save the company about $30 million, said Citizens spokesman Michael Peltier.

“Our message to policyholders and the courts is if there is a confirmed sinkhole, we do want to repair the home – but we do not want to write a blank check,’’ said Dan Sumner, Citizens general counsel, at the company’s board meeting in Orlando Wednesday.

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February 04, 2014

Scott now urges Boehner to support flood insurance bill

@learyreports 

Gov. Rick Scott today urged House Speaker John Boehner to take up legislation to provide relief to Florida homeowners getting rocked by higher flood insurance rates.

“For too long, Florida has been a donor state to the National Flood Insurance Program by contributing $16 billion over the last three decades, which is nearly four times the amount Florida homeowners have received back in claims," Scott said in a statement. "I also again extended an invitation to Speaker Boehner to join me if the President accepts my invitation to meet on this important topic. The President needs to let Florida families know now how he will undo the outrageous flood insurance hikes he forced on Floridians. Whether a legislative or executive fix, we need immediate action for Florida families.”

The move is a bit of a shift for Scott, who had basically ignored Congress and tried to press President Obama to take executive action. Boehner and other House leaders have indicated they do not like the Senate bill that passed last week, contending it goes to far in reversing 2012 reforms under the Biggert-Waters Act. Today, House Democrats attempted, and failed, to use a procedural tactic to get a vote on the Senate bill.

January 16, 2014

Garcia offers up proposal as Congress continues to grapple with flood insurance

As Congress continues to struggle over resolving the flood insurance rate hike crisis that threatens thousands of Florida families, Miami Congressman Joe Garcia introduced legislation Thursday to delay the proposed rate increases for at least five years.  

The bill is an effort to expand beyond the partial delay in flood rate increases included in a massive spending bill sent to the president Thursday. Under that proposal, FEMA would delay rate increases for some properties who were expecting rate increases beginning this fall because of new flood maps but it didn't address properties already hit by huge increases.  Download HOME Act of 2014

The proposal by Garcia, a Democrat, faces an uphill battle, however. House Speaker John Boehner said Thursday that the GOP-controlled House is “not going to do that” when asked about the legislation aimed at delaying the 2012 flood insurance fix, although he added he's willing to consider more modest, unspecified changes to the flood program.

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December 17, 2013

Brandes and Ahern file bill to open market for private flood insurance

By Stephen Nohlgren, Tampa Bay Times

CLEARWATER — A bill to alleviate skyrocketing flood insurance premiums was filed Tuesday in the Florida Senate — an attempt to find a state solution to what has so far been largely a federal issue.

The bill, sponsored by Sen. Jeff Brandes, R-St. Petersburg, would encourage private companies to begin writing flood insurance policies in Florida to compete with the national flood insurance program and hopefully lower premiums, Brandes announced at a news conference.

The bill would streamline the state's regulatory procedures for flood insurance, add more state employees to vet insurance products and give home owners more flexibility about how much they insure, he said.

"We hope to have this bill to the governor's desk early in the session,'' Brandes said. "It is designed to go into effect immediately,'' he said, unlike most new laws which take effect in July.

Many mortgages written in Florida require homeowners to carry flood insurance, almost all of it provided by the National Flood Insurance Program. Congressionally mandated premium increases that began taking effect last year have caused some people's payments to rise so high that they cost more than the mortgage itself.

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December 02, 2013

As Citizens dictates repairs on damaged homes, families try to push back

Emilie and Fred MoutranTo Fred and Emilie Moutran, there’s no dispute that the cracks in the walls of their Spring Hill home were caused by the shifting ground of a sinkhole deep below the surface.

The floor under the chimney has dropped three inches. A gash runs across their mantel. A crack extends the length of a hallway, and the ceiling over the garage has shifted so much that the Moutrans fear it will collapse.

“We hear cracking and popping at night, sometimes all night long, and we’re starting to get very concerned,” said Fred Moutran, 31, who lives in the home with his 64-year-old mother, Emilie.

After two engineering firms concluded the damage was caused by sinkhole activity, the job of repairing their home and the stabilizing the ground fell to Citizens Property Insurance, the state-run company. For three years, the family has been trying to get Citizens to make the repairs.

But the insurance company sent them a check for $21,000 to cover cosmetic repairs, not the fixes to the foundation that will shore up their home.

“They want to force us to make the repairs their way,” Moutran said. “We paid for a service with the understanding it would be there when needed, not three years later.”

The Moutrans are not the only family accusing Citizens of denying repairs and delaying their case. An estimated 1,800 homeowners have filed lawsuits against the company challenging their sinkhole claims. Citizens acknowledges that most of the disputes involve disagreements over the method of repair. More here.

Photo: Emilie and Fred Moutran at their Spring Hill home by Octavio Jones, Tampa Bay Times

 

November 12, 2013

Scott and Bondi: We support Mississippi's attempt to sue FEMA over flood insurance

Gov. Rick Scott and Attorney General Pam Bondi don't like the rising flood insurance rates threatening nearly 300,000 Florida homeowners so they're filing an amicus brief supporting Mississippi's lawsuit against the federal government’s National Flood Insurance Program’s rate hike.

Scott and Bondi, however, have stopped short of putting Florida's muscle into the melee and have chosen not to join the lawsuit or file a companion challenge of their own.

“We are supporting Mississippi in their lawsuit against FEMA because the NFIP rate hike will not only hurt Florida families but will devastate our real estate market,'' Scott said in a statement.

Bondi said: "Floridians are facing outrageous, unaffordable flood insurance premiums, and we support all efforts to protect policyholders from these devastating insurance rates.” Here's the brief:  Download Amici-Brief-Filed-as-Exhibit

November 07, 2013

Brandes wants legislation to increase private flood insurance options

The bandwagon to increase the options for private flood insurance keeps growing. Sen. Jeff Brandes, R-St. Petersburg, is the latest. From a press release:

St. Petersburg, FL- Today Senator Jeff Brandes (R-St. Petersburg) announced that he is drafting comprehensive legislation that will allow private insurers to offer alternatives to the National Flood Insurance Program (NFIP) in Florida. Citing a recent congressional proposal to delay the implementation of the Biggert-Waters Act by four years, the Brandes legislation will allow insurers to utilize that delay to establish additional, more affordable choices for consumers. 

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October 29, 2013

Atwater wants answers on why property insurance premiums aren't dropping

Chief Financial Officer Jeff Atwater is asking for state insurance regulators to explain why property insurance companies don't seem to be passing along their cost savings to consumers.

At the heart of the issue is the drop in the cost of re-insurance, which has dropped in price after a series of legislative reforms. Atwater asked the same question to Florida Insurance Commissioner Kevin McCarty in an August letter. McCarty responded in a letter, and at a recent Cabinet meeting, and said that rather than reduce the cost of premiums for consumers, insurers were purchasing more re-insurance.

Now, Atwater wants better answers and he is asking McCarty to prepare a report by Dec. 18.

"My question to you is simple: 'Why have rates not come down?',” Atwater writes. Here's his letter:  Download 10.29.2013 Letter to McCarty Regarding Property Insurance Costs (1)

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October 11, 2013

Feds file rule change to encourage private market alternative for flood insurance

Federal regulators have weighed into the flood insurance crisis, suggesting banks be required to accept private flood insurance on homes in high-risk areas.

The proposed rule change filed Friday was triggered by an overhaul of the National Flood Insurance Program that is causing huge flood insurance rate hikes for some, with property owners in flood zones in Florida particularly hard hit. It comes at the same time Florida insurance regulators are investigating whether the state could induce private companies to sell flood insurance.

If the federal change is approved, banks and other lenders would have to accept qualified private insurance on loans backed by properties in areas at risk for flooding. Lenders would also have to place in escrow flood insurance payments for certain residential properties and for mobile homes. The rule clarifies that lenders have authority to charge a borrower for the cost of force-placed flood insurance when a property owners fails to get the coverage.

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