close
close
awsum

Why were half of 2023 applications closed without payment?

Neon
Why were half of 2023 applications closed without payment?

play

  • The state’s largest insurer defended its record of settling claims without paying in the first meeting since the one-two punch of hurricanes

At the first meetings of officials ‘The state’s largest insurer’ since then Back-to-back hurricanes wreak havoc on FloridaCitizens Property Insurance Corp. acknowledged data showing half of last year’s claims were closed without payment and how claims were resolved. this year’s storm claims may produce a similar result.

The percentage of claims that are or will be closed without payment will likely be closely watched because this is the first season of major, multi-storm hurricane activity since the state Legislature passed reforms that make it harder to sue insurers. If the policyholder finds a solution inadequate. While the movement advances with the argument that tortious litigation reform is key to shoring up the state’s insurance market worn down by frivolous lawsuits, others see policyholders as being left at the mercy of insurance companies’ decisions.

Reports on the company’s 2023 claims show that Citizens closed a larger percentage of cases without paying out than the state’s other private insurers. The state experienced one hurricane last year – Hurricane Idalia hit the sparsely populated Big Bend region at Category 3 strength in August 2023.

A report by Palm Beach Gardens ratings agency Weiss Ratings found that the government-backed insurer of last resort settled 50.4% of homeowner claims in 2023 without paying out. This compares with 36.7% for University Properties and Casualty. Castle Key Insurance, Castle Key Indemnity, and State Farm Florida’s percentage of settling claims without payment ranged from 46% to 47.1%.

Media coverage of this report, initially from the Tampa Bay Times/Miami Herald Tallahassee bureau, drew criticism from members of the Citizens Claims Committee and Citizens’ insurance chief Jay Adams, who met on Thursday, Nov. 21.

“The headlines on these articles look like: ‘Citizens Insurance had the worst rate at compensating Floridians, half the people got nothing,’ etc.,” Adams said. said Adams. “Therefore, some of the facts in these articles are misleading.”

Company officials at Weiss Ratings said the conclusion that Citizens has a high rate of settling claims without paying is based on data from Citizens’ own reports available on its website.

“We believe it is important to analyze the data, and it appears Citizens does not fully understand at this time why every claim for this season’s storms has been rejected,” Weiss said in a statement. “We hope that citizens will make the necessary analysis instead of focusing on the headlines they do not like.”

Citizen authorities: It is not surprising that higher compensation claims are closed without payment

Despite his criticism of media reports that the claims were closed, Adams acknowledged there may be some truth in the data behind the Weiss report. Committee chairman Scott Thomas described media coverage of the report as “clickbait”.

“Citizens probably have the highest rate of grace periods, and I think that’s probably very realistic,” Adams said.

However, he said that there are reasons why the requests are closed without payment at this rate.

Between them:

∙ Some homeowners may have sued Citizens for damages even though Citizens were not policyholders; They may have recently been taken from Citizens and unknowingly given to another company.

∙ Citizens have higher hurricane deductibles than others, so damage must rise to a higher threshold to warrant a payout.

∙ Citizens are not covered for storm surges, and obtaining FEMA assistance for such damage requires homeowners to obtain written denials of regular homeowner coverage from an insurer for FEMA assistance.

Adams suggested that a higher rate of claims settlement could be expected due to the nature of the business that Citizens (the government’s insurer of last resort) does.

“We are the ones who write beach houses,” he said. “We’re the only ones who write the news about the wind.”

First two storms of 2024 have similar claim results

Raw data on catastrophic claims on the Office of Insurance Regulation’s website shows insurers collectively settled 28 per cent of Hurricane Ian-related claims in 2022; This figure is significantly lower than the initial results of this year’s first two hurricanes.

So far, more than half of Hurricane Debby claims have been closed without payment, and 45% of Helene’s claims fall into the same category.

Homeowners must file a storm damage claim with their insurance company within one year of landfall.

Democratic Rep. Hillary Cassel of Hollywood expects it to become more apparent after this year’s storms that tort reform passed in 2023 will make all insurance companies less liable and less likely to make policyholders whole in the wake of the storm.

“As of right now, insurance companies have no incentive for consumers to do the right thing,” Cassel said.

Citizen officials: Not much to see here

Citizen policyholders filed claims in response to recent storms, and Adams told them the same factors at work in 2023 could push the percentage of claims closed without payment from this year’s storms to a level higher than that of private insurers.

“It makes sense from a citizens perspective that we would probably have more closed claims without payment than most other carriers,” Adams said.

Adams said Citizens received 3,033 requests for Hurricane Debby, which made landfall in the Big Bend area as a Category 1 storm on Aug. 5, and closed 87% of them. Since Hurricane Helene hit the Big Bend as a Category 4 on Sept. 26, not far from Debby, Citizens policyholders have filed 14,253 claims, 90% of which are closed, Adams said. Milton, which made landfall in Sarasota County on Oct. 9, has triggered 54,554 claims to date, about 76% of which have been settled, Adams reported.

He didn’t say what percentage was closed without payment, but he doesn’t expect these storms to mean large payout levels because Citizens’ policyholders don’t appear to have suffered that much damage this hurricane season. He said Helene and Debby’s damage was largely due to storm surge and is not covered by the majority of citizens’ and homeowners’ insurance policies. Although the National Weather Service reported that Hurricane Milton had made landfall as a Category 3 storm, Adams viewed it differently.

“I believe this storm dissipated before it reached land,” Adams said. “I went out and did damage assessments all over the coastal areas and throughout the state. “We found very few homes with any type of wind damage and we didn’t see any significant damage that would be structural unless a tree fell or something like that.”

But he acknowledged there were 137 tornado warnings during Milton.

“There are places in various parts of the state that have sustained some pretty significant wind damage, but still not enough to destroy the foundations of homes, to tear apart the structure,” he said. “We did not see anything like this in our investigations.”

Anne Geggis is an insurance reporter. Palm Beach PostPart of the USA TODAY Florida Network. toYou can reach him at: [email protected].Support our journalism. Subscribe today

Related Posts