As Climate Change Worsens Insurance Crisis, Florida’s Insurer of Last Resort Uses Forced Arbitration to Falsely Deny Homeowners’ Claims
WASHINGTON — In claims disputes between policyholders and Florida’s insurer of last resort, Citizens Property Insurance Corporation, the vast majority of homeowners are losing their cases in a state-forced arbitration process run by the Florida Division of Administrative Hearings (DOAH), according to a report published today by ProPublica. According to the report, 90% of policyholders have lost their cases in arbitration, and a growing number of homeowners are claiming the forum violates their rights as policyholders.
In a letter to Citizens Property Insurance Corporation, Congressman Maxwell Frost (D-Fla.), questioned the outcomes of the cases, writing “Caught up in these hundreds of cases that constitute Citizens’ near-perfect record with DOAH are constituents of mine who have suffered severe storm damage. To add insult to injury, the arbitration process often leads to policyholders owing thousands of dollars to Citizens’ lawyers because Citizens is allowed to collect attorneys’ fees when they win in arbitration.”
“The use of forced arbitration pushes homeowners in crisis into a non-judicial forum where they struggle to be treated fairly,” said Mekedas Belayneh, policy advocate with Public Citizen’s Climate Program. “By allowing the state-run insurer of last resort to force policyholders into a rigged system, Florida lawmakers are letting industry insiders decide homeowners’ financial fates.”
Earlier this month, a Florida county judge issued a temporary injunction blocking Florida Citizens Insurance from sending claims disputes to arbitration across the state. The company has appealed the decision.
“Beyond depriving them of their right to sue, the state law forcing arbitration disadvantages Florida Citizens policyholders and increases their risk of financial ruin from climate-fueled extreme weather,” said Belayneh. “Florida lawmakers must act swiftly to close this loophole affecting only policyholders of the insurer-of-last-resort, to restore fairness and equity to a system in crisis.”