What Policyholders Need to Know About Citizens Property Insurance Corporation's Inspections

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Citizens Property Insurance Corporation has been inspecting homes and taking back discounts previously provided to policyholders based on implementation of wind resistant measures.  A report published recently in the Sun Sentinel indicates that the inspections understandably have drawn criticism.  Premiums have risen for 3 in 4 policyholders subject to the inspections, whereas premiums have gone down for only 7 percent of homeowners.  The annual premium for the remaining policyholders subject to the inspections have remained unchanged.

Critics contend that the inspections are a way for Citizens to circumvent the ten percent cap on annual premium increases.  According to estimates provided by Citizens, premium increases related to the inspections have generated $137 million, and the cost of the inspections are estimated at $35 million to this point.

Citizens disputes that the inspections constitute subterfuge to circumvent the annual maximum on premium increases.  “Citizens provides $1 billion in credits annually to its policyholders.  It is imperative that we only provide credits for policies which actually contain wind mitigation features,” contends Christine Ashburn, a Citizens spokesman.  She also told the Sun Sentinal that Citizens has the right to charge fees to nearly all Florida residents to offset shortfalls in the event of a major hurricane, so the financial cost of unjustified discounts will fall on state residents.

Citizens has subjected more than 225,500 homeowners to inspections as of late July with the net result being an average rate increase of $598.  Because Citizens is Florida’s largest property insurer with over 1.4 million policyholders, these inspections have adversely impacted many homeowners.  This blog provides answers to questions and issues related to the inspections being conducted by Citizens.

What should a policyholder do if they are subject to an inspection?

The homeowner should ensure that any storm mitigation measures are easy for the inspector to identify.  The inspectors can remove credits for wind damage prevention measures without waiting for the homeowner to make the premises ready for inspection.  While the shutters might not need to be in place, the hardware should be permanently installed.  An insured should also have documents like permits and receipts that relate to any upgrades made by the homeowner.

An example is provided by Wayne Bragg who told his story to the Sun Sentinal.  Bragg indicated that last year when Citizens sent an inspector to his home his discounts were approved.  When the inspector examined the premises this year, he indicated that he could not see the attic trusses because they were obscured by insulation.  The inspector also claimed that he was unsure if all the shutters were present because they were stacked up.  Bragg disputed the accuracy of these observations.  Following the inspection, Bragg’s premium increased by $3,000 from $4,700 to a total premium of $7,700. 

What options does an insured have if she cannot pay the increased premium?

You can dispute erroneous inspection findings.  If a policyholder disputes the inspection report, the conclusions and findings can be challenged by producing evidence like documents, photos, receipts, and invoices that pertain to wind resistant features installed in the home.  If this strategy does not work, the policyholder might adjust the deductible or reduce the amount of coverage. to lower the premium.

What should you expect to happen after the inspection has been conducted?

Policyholders will be mailed a letter that provides instructions on obtaining the inspection report approximately 45-60 days after the inspection.  New discounts, which are predictably rare, become effective immediately.  Any withdrawn discounts will be imposed when the policyholder renews the policy.

Is it worth hiring someone to install storm mitigation upgrades after the inspection has been conducted?

The answer to this question will vary depending on a homeowner’s individual situation.  If you have the improvements installed, it will make your home safer when a severe tropical storm or hurricane occurs.  However, a decision based on the cost of the improvements when compared to the discounts must be closely evaluated.  The renewal notice can only provide an estimate of potential discounts which must be considered in light of the cost of upgrades.  A remediation inspection can be arranged for $50 to $100 according to Citizens.

Why is it important to keep documentation of any wind mitigation upgrades?

It is important to keep in mind that 75 percent of those who have had their homes inspected have had their premiums increased and their discounts denied.  Because some of these denials are unjustified, appropriate documentation might be necessary to prevail during a re-inspection. 

For example, Marc Velletri told the Sun Sentinal about a personal experience that demonstrates the importance of preserving paperwork.  When his home was inspected, the Citizens inspector was skeptical that the installed windows were hurricane-impact resistant.  According to Velletri, the windows were labeled as impact windows.  He also had one of the original removable labels for the window along with the receipts from the home improvement stores where the windows were purchased.  The inspector claimed that some of the printing on the windows was difficult to read.

Diana Latzko provides another example of the importance of carefully preserving documentation.  She built a file filled with permits and supporting documents to confirm her hurricane-resistant upgrades.  Even though she had meticulous documentation, the adjuster still intended to increase her premium by almost ten percent.  However, she successfully fought the increase with the additional documentation.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

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