Water damage from damaged plumbing is the primary cause of water-loss insurance claims

9/7/2014 (Permalink)

Hose leaks are a major cause of flooding resulting in water damage in Palm Coast FL.

Citizens Property Insurance Corporation Forms a Special Team to Deter Customers’ Lawsuits

Faced with a tremendous amount of legal costs, Citizens Property Insurance Corp. is creating a team in South Florida to help minimize the amount of water damage lawsuits filed by their customers. According to a Citizens report, there were 16,151 of these types of claims filed between January 2008 and August 2012. Ninety-Six percent of the lawsuits originate from Palm Beach, Miami-Dade and Broward counties. The lawsuits were filed because of Citizens refusal to pay all or some part of the insurance claims submitted. Miami-Dade, Broward and Palm Beach represented 96% of the customers with court claims.

Leaking or damaged plumbing is the primary cause of water damage insurance claims. Over the past year, these types of claims amounted to half of the insurance claims submitted to Citizens. According to a company assessment, lawsuits involving Palm Beach County customers forced the insurance company into court 997 times. These court cases accounted for six percent of the insurer’s statewide total.

The cost of litigation affects both Citizens Property Insurance Corp. and their customers. Dealing with legal disputes increases the cost of operation for Citizens Property. Over the five-year period covered in the assessment, $135.5 million was spent on legal fees in the tri-county area. The Flagler county cases cost Citizens Property Insurance Corp. $9 million in legal fees. It is the goal of Citizens’ Florida team to find a resolution to these customer issues before they evolve into a lawsuit.

According to Christine Ashburn, Vice President of Communications, Legislative and External Affairs for Citizens, the South Florida staff will provide opportunity for the insurance company to increase their damage estimation and policy language training in order to make better decisions regarding water damage, wind damage, flood damage and all types of claims.

One of the major sources of the numerous litigations is the fact that Citizens does not provide coverage for long-term leaks. Jay Adams, Vice President of Claims for Citizens states, “A lot of times, there will be leaks and [homeowners] will kind of live with it. “Unfortunately, as time progresses the water leaks remain unfixed and cause greater problems like water damage.

Citizens Insurance’s policy states that policy holders have 14 days from the discovery of a leak or broken pipe water damage to report any damages. The policy will covers repairs to those damages. It does not cover any other work like dry wall repair or water damage that was caused by an older leak.

Nancy Dominguez, Managing Director of the Florida Association of Public Insurance Adjusters, believes that Citizens’ 14-day policy on leaks is the cause of the lawsuits. According to a statement issued by Nancy Dominguez’s organization, the majority of insurance claims deal with water damage that is hidden behind walls or under floors that remains unseen for weeks. The organization believes that Citizens’ policy is not consumer friendly and the policy’s language increases the amount of claims that get litigated for Citizens and insurance companies with similar policies.

According to Paul Handerhand, President of the Statewide Adjustable Association, the unclear language in Citizens’ insurance policy is harmful to consumers. Handerhand states, “The ambiguous policy provides their adjusters with more discretion to deny claims. Unfortunately, the denial of the claims force policyholder to relay on the court system to get compensated for their losses.

If you need help with flood damage in Palm Coast, Flagler Beach, Hammock Dunes, Beverly Beach, Bunnell, Marineland, Hammock, Hammock Beach or anywhere in Flagler County, please allow us to be of assistance Give us a call at (386) 447-2202.