Citizens Property Insurance Corporation removes insurance discounts on more than 100,000 homes
May 18, 2012
The following article was published in the South Florida Sun Sentinel on May 18, 2012:
Citizens removes insurance discounts on more than 100,000 homes
By Paul Owers
More than 100,000 Florida homes re-inspected by the state-run insurer of last resort have lost windstorm discounts, resulting in average premium increases of $600 a year, according to data released this week.
Citizens Property Insurance Corp.says it has removed improper discounts from 62 percent of 173,000 homes. About 32 percent had no change, while 6 percent ended up with lower premiums because the insurer found additional discounts.
The insurer expects to net roughly $81 million from eliminating the discounts. The figures are as of April 30.
Citizens, which has been unable to schedule nearly 7,100 inspections, says it offers $1 billion annually in credits for shutters and other windstorm protections. But it started cutting back in late 2009 after learning of “significant” errors on the forms submitted by homeowners.The required documentation can be confusing, and the insurer says it isn’t accusing homeowners of lying to get the credits.
“But it’s our responsibility that we make sure we’re writing the right premium for the risk,” spokeswoman Christine Ashburn said Friday.
In February, a Pembroke Pines man filed suit against Citizens over the lost discounts.
After having an inspection and getting a discount, Kenneth Babbitt received a letter from Citizens, which required another inspection, the suit said.
The insurer removed discounts as a result of the inspection and added $253 to his $1,029 annual premium, according to the suit, which seeks class-action status.
Babbitt’s lawyer, Gregory Weiss, has called the reinspections a “scheme” by Citizens to get more revenue.
“It’s not a small number of folks who are affected by this problem,” Weiss said.
Babbitt filed the suit in Broward County Circuit Court. Citizens is asking to have the suit moved to Tallahassee, where the insurer is based. Ashburn said the insurer has no comment on the suit.
Find this article here: http://www.sun-sentinel.com/business/realestate/fl-citizens-discounts-20120518,0,6144504.story