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What is Citizens Property Insurance Company in Florida?

Citizens Property Insurance Company is a state entity created in 2002 after a number of private insurers stopped writing windstorm policies in the state of Florida, leaving thousands of consumers unable to find any windstorm coverage for their homes.  (More on the fabricated reasons given by private carriers as excuse for their withdrawal from the windstorm market…spoiler alert: they never really left and instead are gouging consumers in the newer endeavor, reinsurance.)  Over the past decade, more and more homeowners have been forced into Citizens.  This has expanded the risk to the state in the event Florida is hit with a catastrophic storm.  This expanded risk, in turn, has caused great concern to taxpayers and legislators alike, to the point where efforts have been made and ideas considered and pursued the past few years with the common, simple goal: reduce the risk to Citizens and the potential for assessments of all taxpayers for any shortfall experienced by Citizens in the event of a catastrophic storm.

What is Mitigation?

One method used by private insurers and Citizens alike to reduce risk is something called “mitigation.”  Mitigation means reinforcing a home with structural modifications that protect the home from major damage a big storm.  Common mitigation techniques include shutters, garage door reinforcements, and reinforced attachment for trusses that hold the roof structure in place.  When a homeowner installs these and other reinforcement devices in his or her home the homeowner reduces the risk of major loss.  Since protecting a home also reduces the insurance company’s potential exposure, a homeowner who installs mitigation devices receives reductions in their premium know as “mitigation credits.”  Like private insurers, Citizens has a mitigation credit program that rewards homeowners who mitigate Citizens’ potential exposure…and the risk of assessment that all Floridians face if Citizens runs out of money.

Except, however, that Citizens argubaly doesn’t live up to the benefit of its bargain.  Citizens has decided to go back on its agreement to give premium credits for mitigation, and it has done so after changing the rules.  Thousands of Floridians who mitigated their homes in accordance with Citizen’s rules and its certification that the credit would be good for five years are now losing their credits and seeing their premiums go up significantly because Citizens changed its mitigation standards and applied that change retroactively.  This is a breach of contract by Citizens that is arguably costing homeowners upwards of $190 million in premium increases.

Our office, Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, with co-counsel, are proud to have filed a class action on behalf of Citizens’ insureds who followed the rules in effect at the time, mitigated their homes and reduced risk, and were and are entitled to their mitigations credits but lost thousands of dollars because Citizens changed the rules in the middle of the game. Please let us know if you need or want more information regarding this the Citizens Class Action.