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Citizens Property Insurance Corporation by definition is a state-created, not-for-profit, tax exempt governmental entity whose public purpose is to provide property insurance coverage to those unable to find affordable coverage in the voluntary admitted market. While touted as entity that was formed to help Floridians, Citizens’ actions are under fire again. There has been on-going concern by many of Citizens’ policyholders who have experienced premium increases after their property failed to qualify for the hurricane mitigate discounts that were previously in place.

On its website, Citizens lists the acceptable wind mitigation features that qualify for premium credits:

Premium Credits for
Wind Mitigation Construction Features

Below is a list of wind mitigation features Citizens accepts for premium credits for multiperil and wind-only policies. Contact your agent for more details and to find out who is eligible to perform an inspection of your home or business.

Mitigation Features Eligible Building Types

Roof Covering

Common types include shingles, clay tiles, metal, and built-up tar and gravel. This feature must meet or be equivalent to the Florida Building Code.
  • Single-family homes
  • Apartment units
  • Residential condominium units
  • Commercial residential apartment and condominium association buildings

Roof Deck Attachments

 

The method used to connect the roof decking (plywood, metal panels, etc.) to the roof trusses or rafters.

Also includes cast-in-place or pre-cast concrete and self-supporting roof systems.

Secondary Water Resistance

Material applied to the roof covering to prevent water from intruding into the structure.

Does not include roofing felt or similar paper-based products.

Opening Protection

Wind-borne debris protection devices installed to protect structure openings (windows, skylights, doors, etc.).
  • Single-family homes
  • Apartment units
  • Residential condominium units
  • Commercial residential apartment and condominium association buildings
  • Buildings used for commercial purposes

Roof-to-Wall Attachment

The method used to connect the roof trusses or rafters to the walls of the structure
  • Single-family homes
  • Apartment units
  • Residential condominium units3 stories or fewer only

Roof Shape

Common roof shapes include hip, gable or flat.
  • Single-family homes
  • Apartment units
  • Residential condominium units3 stories or fewer only

Many policyholders are losing discounts, that were in place on previous policies. Several news sources throughout the state have reported Citizens policyholders are losing their wind mitigation discounts, even though the properties have not changed. On May 19, 2012, The Herald-Tribune reported Citizens was conducting 209,000 inspections in 2012 to verify that hurricane discounts were properly awarded.

Citizens’ reinspections are creating a 23 percent rate jump for homeowners, even as the company is restricted to 10 percent annual increases through normal rate-setting.

On July 19, 2012, Orlando’s Action 9 News investigated home insurance rate increases and reported,
“in Central Florida, Citizens has reinspected 7,000 homes, and 77 percent of the owners had premium increases by an average of $450”.

In response to Action 9, Citizens said a new state law allows companies to establish their own guidelines for approving discounts. The company denied that any owners have lost discounts for real structural improvements.
On July 21, 2012, the Sun-Sentinel reported Citizens Revokes Hurricane-proofing Discounts and gave the details of an inspection in Boca Raton,

Paul Stuart, a Boca Raton resident and Coconut Creek City Attorney, said Citizens incorrectly had his opening protection discount removed after an inspection. That and some higher coverage limits made his annual premium increase $638 to $4,466….Citizens denied that it was using the inspections as an end run around the cap on premium increases. ‘The purpose of this program is not to circumvent the 10 percent cap,’ said Citizens spokeswoman Christine Ashburn. ‘Citizens provides $1 billion in credits annually to its policyholders. It is imperative that we only provide credits for policies which actually contain the wind mitigation features.

Robin Westcott, Florida’s Insurance Consumer Advocate has recognized the problem with the inspections and gave the Sun-Sentinel an example of what has crossed her desk.
“[A] consumer who had three inspections done by Citizens’ contractors and each had a different result. One inspector pulled permits and took a photo of roof clips to help the consumer score discounts. The other two did not pull the permit and wrote “other” instead of noting the clips were there. “What is ‘other’? Well, they lost all of their credits.”
Just four days ago, the Palm Beach Post showcased the data it received from a public records request of Citizens files. Of the 225,000 inspections that were reviewed, 50 million dollars in increases were implemented from 90,000.00 policyholders.

A summary of the data from Citizens as printed in the Palm Beach Post:

Citizens announced in August that it had made adjustments to the program and would “consider” further recommendations at its September board Based on these news reports and others, it seems policyholders with wind mitigation construction features on their homes and businesses need to be armed with the receipts, permits, and documentation to prove discounts are due — even then it could be a battle.

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