Sinkhole Settlement to Save $30 Million in Legal Costs For Florida’s Citizens Property Insurance
Mar 12, 2014
At its Board of Governors (“Board”) meeting this morning, March 12, 2014, Citizens Property Insurance Corporation’s (“Citizens”) General Counsel Dan Sumner advised that the State-run insurer has reached agreements with 300 of its policyholders to allow them to make critical sinkhole-related repairs to their properties without spending further time in litigation.
The global settlement reached between Citizens and a Florida-based plaintiffs’ law firm representing the policyholders will allow homeowners to receive needed repairs, while enabling Citizens to avoid an estimated $30 million in potential litigation expenses, Mr. Sumner explained.
“I’m confident this decision represents a new focus by all parties on getting appropriate repairs completed instead of battling in court,” he added.
Under the terms of the settlement, Citizens will pay for underground repairs as recommended by a professional engineer, who will monitor repair work and order any additional underground repairs deemed necessary. Policyholders will be allowed to choose a contractor from a pre-approved list. Citizens also will pay for any additional above-ground damage caused by the sinkhole repair.
Citizens will pay the plaintiffs’ firm $2 million for legal fees and expenses already incurred. Under the global settlement, Citizens has agreed to pay $10,000 for cases in the early stages of litigation and $5,000 each for cases in which discovery has begun but litigation has not yet been filed..
According to Citizens’ news release issued this morning after the Board meeting ” . . . the settlement will provide closure to property owners by helping them repair and protect what for many is their most valuable investment. Local communities and future buyers also will benefit from increased property values and the knowledge that professional repairs have been completed.”
A full report on this morning’s Board meeting is forthcoming.
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