Groups call on Florida Insurance Commissioner to Reform Citizens Insurance Arbitration Process
WASHINGTON — After revelations of deep flaws with Florida Citizens’ Insurance’s use of forced arbitration to resolve conflicts between Florida’s insurer of last resort and policyholders, a coalition of consumer protection and insurance reform groups today called on Florida Citizens to reform its appeals process.
In the letter, Public Citizen, Consumer Federation of America, Center for Insurance Research, Affordable Homeownership Foundation, Catalyst Miami, Manufactured Housing Action, a project of the Tides Center, Miami Homes for All, and South Florida Freedom Road Socialist Organization, cite reporting that shows policyholders in Florida who seek relief are forced into arbitration where the insurer almost always wins.
“Florida’s 840,000 policyholders participating in Citizens are subject to a process where the insurer wins more than 90% of cases, policyholders unfairly risk paying the insurer’s attorney fees, and settlements often amount to less than $500,” the groups write. “This system denies Floridians meaningful relief after disasters and undermines public trust in the state’s insurance system.”
The groups call for rapid policy reform by Florida’s Insurance Commissioner to protect Citizens policyholders, including:
- A full list of recommendations for legislative changes to remove forced arbitration for Citizens policyholders, and
- For the Insurance Commissioner to order the Citizens’ Inspector General to conduct an independent investigation of arbitration fairness and conflicts of interest among judges and release a report publicly.
“Florida Citizens policyholders have nowhere else to go for homeowners insurance,” said Mekedas Belayneh, policy advocate with Public Citizen’s Climate Program. “At a time of rising climate-related disasters and shrinking coverage, policyholders should not be met with a process that makes it even harder to receive a fair payout for damages. Forced arbitration funnels people into a system that lacks the transparency, oversight, and basic protections of the courts precisely when they’re most vulnerable after experiencing severe damage to their homes. The state should be strengthening insurance consumer protections, not weakening them. Closing this arbitration loophole is an essential step toward rebuilding trust in insurance and ensuring that every policyholder has the ability to recover without facing financial distress.”
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