Sun Sentinel House Keys Blog: Citizens’ premium hikes blamed on county data
Nov 12, 2010
The following article was posted the the Sun Sentinel House Keys blog on November 12, 2010:
Citizens’ premium hikes blamed on county data
By Julie Patel
Citizens Property Insurance customers have complained of premium increases since the state-backed insurer started using Broward County property appraisal data.
Several homeowners report that the problem seems to have stemmed from Citizens using the “actual year built” instead of what it was using before, the “effective year built,” as one factor when calculating premiums. The effective year built is an estimate of the date of a home based on upgrades to a home and additions and in some cases, additions make up most of older homes.
Denyse O’Grady said Citizens increased the premium on her Fort Lauderdale home 72 percent from $1,800 to $3,100 after changing the date. Mark Budwig, who lives in Fort Lauderdale’s Victoria Park neighborhood, reports his premium was increased 47 percent from $4,636 to $6,795. “They’re looking for a way to increase” premiums, Budwig had said when he told us about the issue.
A document from the county appraiser’s office for Budwig’s home says “100% complete Jan. 1, 1959.” On another corner of the document the year, 1939, is written without an explanation of what the year signifies.
Broward County Property Appraiser Lori Parrish said she has received complaints about this issue for months and has been fighting Citizens on it. “Citizens is a disaster. They are suppose to go and inspect properties,” Parrish wrote in an email. “They should not be using our website for the rates the charge they should get off their duffs and inspect properties.”
Citizens is planning to do broad inspections next year to check the condition of homes, the age of roofs, among other things.
We’re waiting to hear back from Citizens. But Citizens Spokeswoman Christine Turner Ashburn wrote to Parrish’s office to say the county data does not serve as substitute for inspections but is used as a service for policyholders. “If we receive an application without verification, we will use the property appraisal for determination of the year built, to avoid rejecting the application or canceling the policy,” she wrote. “Citizens does not directly use the BCPA data to deny coverage, change mitigation features, or increase premiums. However, as stated, it is one of the acceptable methods of documenting year built. The year built of a home can affect eligibility for coverage, as well as whether a home is eligible for certain automatic mitigation credits. It can also affect the premium in other ways.”
She said Citizens uses the data if it doesn’t have any other proof of the age of a home but the insurer will accept proof of the date if it’s provided several other ways:
- An appraisal by a licensed Florida appraiser
- Certificate of Occupancy, provided it clearly indicates the original year built
- Property card from the county showing the year built
- Mitigation documents if they indicate the year built
- Underlying carrier’s declarations page indicating the year built
It’s unclear if Citizens is using the age to calculate the cost of rebuilding homes, which has also pushed up premiums in recent years even as construction slowed.