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Citizens Property Insurance Corp. – Florida Government in Action


Floridians need real help on insurance issues from our legislature and governor and it is not in the area of flood insurance premiums. Floridians need help with insurers who want to accept all the favorable legislation they can get (see our articles on PIP and sinkhole coverage), they want to be able to limit coverage without adjusting premiums down for the significantly reduced coverage and we are then saddled with a state run company that does only the bare minimums for its policyholders because it believes it should be immune from bad faith claims handling.

All very nice for the insurance industry and the state’s Citizen’s Property Insurance Corp.

All really lousy for Floridians forced to get insurance through Citizens.

What is our government doing about it? Seeking to reduce flood insurance rates; attacking the federal government instead of private insurance companies? That seems to be about it.

A case was recently decided by the First District Court of Appeals that told Citizens Property Insurance Corporation it is NOT okay to deal with policyholders in bad faith and if they do a cause of action under F.S. 624.155 DOES provide policyholders with potential recourse. In Perdido Condominium Assoc., Inc. v. CCitizens Property Insurance Corp., (case no. 1D13-1951) the court set forth in its 1/23/2014 opinion:

“In light of the definitions of “willful” and “tort,” and considering that Citizens, while not a private insurance company, is nonetheless charged by the legislature to provide affordable property insurance to policy holders and to serve the policy holders at “the highest possible level but never less than that generally provided in the voluntary market,” (F.S. 627.351(6)(a)4., Fla. Stat.), the “willful tort” exception to Citizens’ immunity from suit allows Citizens’ to be sued for the statutory civil remedy provided in section 624.155(b).”

In a prior case, Perdido Condominium had alleged that Citizens had breached its insurance obligations by failing to “’promptly settle claims’ in order to influence partial settlements” and won on their breach of contract case. This new case was a lawsuit for Citizens unfair, bad faith dealing in violation of the claims administration statute (F.S. 627.426). Citizens claimed that its enabling legislation provided it immunity from policyholders actions under the civil remedies provided for in Florida Statute 624.155.

Although the First District Court of Appeals determined that Citizens was not immune from its violation of fair claims practices, the court has certified the question to the Florida Supreme Court to settle the issue with finality.

Should the Supreme Court ultimately tell Citizens they are not immune from bad conduct and they can not abuse policyholders with impunity, perhaps they will stop wasting money trying to deny righteous claims? For example, Dunedin residents Michael and Jane Dupre’s home that completely collapsed because repairs were delayed due to an argument over the extent of repairs claimed by the Dupre’s and the amount Citizens was willing to pay. Citizens refused to pay for “underpinning” to support the home during other repairs and the Dupre’s home subsequently was swallowed by the sinkhole.

Or, Tallahassee resident, 64 year old Emilie Moutran who continues her fight with Citizens as her house slowly cracks apart.

The Miami Herald reports that the Dupree’s and Ms. Moutran are simply two of the 1800 homeowners who have filed lawsuits against Citizens for denying all or part of sinkhole claims.

1800 homeowners. Let’s say Citizens pays its lawyers $20,000 only per case. $36 million just to keep from paying homeowners.

Do we think all 1800 homeowners are wrong and is Citizens spending our money wisely under the state’s direction?

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