Citizens Property Insurance sued over lost discounts
Feb 16, 2012
The following article was published in the Palm Beach Post on February 16, 2012:
Citizens Property Insurance is Sued Over Lost Discounts
By Paul Owers
A Pembroke Pines man has filed a lawsuit against Citizens Property Insurance Corp., alleging the state-run insurer of last resort negated policies that entitled homeowners to discounts.
In the suit filed this week in Broward County Circuit Court, Kenneth Babbitt said he paid for an inspection to qualify for wind-mitigation credit and later received a discount from Citizens. A month later, the insurer notified him that it was requiring a second inspection, conducted in December, according to the suit, which seeks class-action status.
Shortly thereafter, Citizens took away Babbitt’s discounts, resulting in a $253 increase to his $1,029 annual premium, even though he had made no changes to the home since his original inspection, the suit said.
A 2005 Florida law requires insurers to notify policyholders of discounts available for installation of fixtures or construction techniques that would reduce losses in a hurricane.
The suit alleges that Citizens’ reinspections are a way to recoup some of the $974 million in revenue lost because of the discounts.
Babbitt’s lawyer, Gregory Weiss, said the reinspections are a “scheme by Citizens to circumvent the cap on rate hikes by reclaiming revenue from properly issued wind mitigation credits.”
Joseph Osborne, another lawyer for Babbitt, said the insurer hired its own inspectors, “whose expressed purpose was to devalue the original inspection and bolster their premiums.”
A Citizens spokeswoman could not be immediately reached for comment Thursday.