Citizens’ Litigation Costs Tailspin in Sea of Claim Denials and Dropped Policies

Citizens’ 1.2 million policyholders should be outraged.  A recent report revealed that Citizens collects $2.2 billion in annual premiums, but monthly, pays an average $2 million in plaintiffs’ attorneys’ fees for lawsuits filed due to Citizens’ failure to pay insurance claims.

Over the past three years, Citizens paid more than $16 million to plaintiffs’ lawyers who prevailed in disputes over claim denials, coverage, and payment issues.  It is estimated Citizens spends more than $30 million per year defending these lawsuits, although Citizens reported that data was not yet available.

Citizens’ litigation costs have skyrocketed as the number of homeowner claims have increased, particularly in Miami-Dade, Broward and Palm Beach counties, along with the insurer’s claim denials and the delays in claims handling and payment affecting policyholders.

But not many policyholders will remain with Citizens for long if Citizens continues to have its way.  Florida’s insurer of last resort received approval from the Office of Insurance Regulation to shed 400,000 policies by November and another 200,000 policies in December.  The policies are being transferred to several other private Florida insurance companies, and policyholders will have the option to stay with Citizens or switch to the private insurer.

“I think this practice is outrageous,” states Harvey V. Cohen, managing partner of Cohen Battisti, Attorneys at Law.

President and CEO of Citizens, Barry Gilway, calls the reduction in policies an “unprecedented success.”  Notably, Citizens also just received approval from the Office of Insurance Regulation to increase premiums next year by an average 6.3 percent.  This is lower than Citizens’ original request for a 7.9 percent increase.

With millions of dollars going toward plaintiffs lawyers who successfully bring challenges against Citizens for breach of contract for claim denials and delays, and the ongoing costs of defending lawsuits, Floridians and their government representatives should keep a close eye on Citizens and expect more grand-scheme changes in both insurance policies and Citizens’ internal policies in the coming months.

Contact Cohen Battisti, Attorneys at Law, if Citizens or any insurance company has denied, delayed or defriended your claim.


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