Sinkhole-Related Claims Down 61 Percent for Florida’s Citizens Property Insurance, Committee Learns
Nov 14, 2013
Florida’s Citizens Property Insurance Corporation (“Citizens”) Claims Committee (“Committee”) met via teleconference today, November 14, 2013.
As part of the agenda, Citizens’ Vice President of Claims Jay Adams presented the key performance indicators for the third quarter. The first notice of loss reports received through September 2013 reflects a 34.6 percent decrease compared with those received during the same time period in 2012. Sinkhole claims and water loss claims have decreased, he noted.
Mr. Adams also presented an update on Citizens’ sinkhole stabilization managed repair program (“program”) for stabilization services only. The purpose of the program is to create a credentialed network of vendors that will provide sinkhole stabilization services for Citizens’ policyholders. The Committee voted to recommend to Citizens’ Board of Governors (“Board”) that it approve the program and allow Citizens to pursue contracts with vendors not to exceed $50 million. Citizens had released a related invitation to bid in October 2013.
Jimmy Johnson, Citizens’ Director of Claims Operations, presented the claims and catastrophe update, reporting that Tropical Storm Andrea made landfall on June 7, 2013. The event spawned 627 claims, 97 percent of which are now closed. The total paid to-date is approximately $1.595 million, with an average claim payment of $5,597.
For Committee approval, Mr. Johnson presented a contract for solicitation of a satellite services vendor, the remuneration for which would not exceed $3 million. The ultimate vendor would be asked to provide two mobile satellites with each having the capability of delivering 100 MB for both voice and data transmissions. The term of the contract would be three years, with Citizens having the option of two one-year renewals. The Committee voted to request Board approval of the contract.
Jeff Lambert, Citizens’ Assistant Director of Claims Operations, updated the Committee on sinkhole-related issues, explaining that new claim volume is down 61 percent from 2012. Loss adjustment expenses have decreased 14.8 percent from 2012.
Citizens’ Director of Litigated Claims Operations Anne Olson presented the litigation management report, relating that new litigation assignments have increased 13 percent over 2012. The increase is driven by residential water losses, which account for 58.42 percent of all new lawsuits received by Citizens in 2013. Additionally, assignment of benefits cases account for 16 percent of all new litigation assignments, she said.
To access all of today’s Committee meeting materials, click here.
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