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Citizens Property Insurance

Assignment of Benefits: A sign of a scam?


They make it sound so simple. You have a sudden water leak in your house. You call a plumber who makes an emergency repair. He tells you there is water damage because it was a sneaky leak that went undetected for long enough to mess with pipes or cabinets or kitchen tile – or the balance of the cosmos. “Let me call my buddy,” he says. “He handles the dry-out process so you won’t have more troubles. Sign this form that transfers your insurance claim, we’ll get you a lawyer to work with your insurance company. Don’t have to worry about a thing.” This is the point at which you should commence to worry.

Signing over your insurance claim means you’ve agreed to step away and let a stranger handle things. And, you may have NO idea what goes on behind the scenes. Here’s a peek: The plumber got a nice referral fee for inviting the water dry-out company to your house, and that guy got money for looping the building contractor in, who also brought in a friend to handle the carpentry, and the attorney figures out a way to file a lawsuit …. Get the picture? You’ve heard the phrase, “Too many cooks spoil the soup.” What do you think too many non-essential people do to the cost of an insurance claim? And, when hundreds of people are roped into this type of scenario, what do you think happens to the cost of homeowners insurance? Yes, easy questions.

The cost of insurance is the cost of claims. Claims go up, insurance goes up. The Consumer Protection Coalition has a number of resources to explain this phenomena called Assignment of Benefits (AOB). Florida insurers have been trying to rein in the practice for a couple of years. There are a couple of bills circulating in the Legislature. Interestingly – or maybe predictably – other states don’t seem to have this as an issue. That tells you something.

Look at the water claims data from Citizens Property Insurance. Their analysis shows that the frequency of water damage claims is up by 45 percent from 2010 to 2014. And, the average cost of each claim rose by 43 percent over that time frame. No, water leaking from pipes has not become over 40 percent more forceful in that four-year time-frame.

Plugging that leak is what the AOB issue is about.

Private insurers have 3 times Citizens’ market share

Citizens Property Insurance has been dominating the news lately, albeit not in a particularly positive way, and it is true that Citizens dominates the homeowners insurance market as a single company with the most policyholders in Florida. But less than a quarter of homeowners have insurance from this state-run entity, and the three-quarters with private insurance should know how the majority rules.

What Citizens customers should know about taking on a takeout insurer

About 210,000 policyholders with home insurance from Citizens Property Insurance Corp. are getting letters from private insurance companies interested in their business. The big question: Should you stay with Citizens or go with a private company?

Shared benefits of a smaller Citizens Insurance

Long-time broadcaster Paul Harvey used to do a popular radio segment called “The Rest of the Story” in which he filled in the blanks on prevailing news or anecdotes of the day. A similar approach is in order for those interested in the rest of the story involving plans to depopulate Citizens Property Insurance, the state-run insurance company.

Citizens Insurance will assess less; good news for private-market customers

What would you think of a CEO who says something like this: “Hey, customers, we have great news! We made some changes in our business and are proud to tell you that you have more reasons to buy from our competitors.” Ummm. What? Well, it makes perfect sense for the CEO of Citizens Property Insurance. We are, of course, talking about the upside down world of Florida property insurance, and a state-run insurer that desires less to run.

No more million dollar homes in Citizens means a billion less storm risk

This is a story of John and the “Dear John” letter he got from Citizens Property Insurance this month informing him that his premium payments for insurance coverage are no longer welcome. His $1 million-plus home would no longer be covered by the state-run insurer effective May 1, and he was more than mildly miffed. He suggested this column, so this one is for John and those like him who are wondering why Citizens would drop coverage for the people who clearly pay the most for coverage on high-value homes.