No Danger of Assessment: Florida Citizens Seeing Just 2,000 Claims from Idalia

September 13, 2023 by

Florida’s Citizens Property Insurance Corp. has so far seen just about 2,000 claims from Hurricane Idalia, well below the threshold that would exhaust the carrier’s personal lines surplus and trigger a surcharge on policyholders, officials said this week.

“There’s no indication there’s a need for an assessment at this time,” Citizens spokesman Michael Peltier said.

Some in the Florida insurance industry had worried that Idalia, which made landfall Aug. 30 on Florida’s lightly populated northeasterrn Gulf Coast, could mean thousands of claims and force an assessment of 10% or more on all Citizens’ policyholders’ premiums. The largest share of policies in the stricken area were written by Citizens, the state-created company designed to be a residual insurer but which has become the largest carrier in the state.

Citizens’ Personal Lines Account has a surplus of $420 million. If that is reached, it would automatically require a surcharge.

But at the Citizens governing board’s Claims Committee meeting Tuesday, Craig Sakraida, vice president of non-litigated claims, indicated that is unlikely.

“We received a little over 2,000 claims. The bulk of those were residential,” Sakraida said.

Some of those are likely to be flood claims, from Idalia’s storm surge, and likely won’t be covered by a Citizens policy. Most homeowners in the hardest-hit Big Bend areas did not carry flood insurance, Sakraida and other reports have shown.

For all carriers, some 18,353 Idalia claims had been reported through Tuesday, the Florida Office of Insurance Regulation said.

About 60% of the properties that filed Citizens claims have been inspected and 15% of the claims have been closed, Sakraida noted. The majority of the claims were from Pinellas and Pasco counties near Tampa, and from Taylor County, home to Perry and other towns that were slammed by the storm.

“We anticipate having this wrapped up fairly quickly, with the low claim count,” Sakraida said.

It’s probable that those claims will not result in a large number of lawsuits, thanks in part to Florida’s legislative changes late last year that trimmed attorney fees and ended assignment-of-benefits agreements, officials said. For the first half of 2023, Citizens was served with 4,711 lawsuits, a 20% decrease compared to the same period in 2022, Jay Adams, chief of claims, told the committee.

The litigation picture is not perfect, though. The number of pending lawsuits against Citizens was still at about 19,000 as of June 30 – the same number seen at that mark in 2022. And the claimant was represented by an attorney, before the claim was filed, in 48% of claims. That’s a 23% increase from 2022, Adams said.

“We just get out-advertised by the plaintiffs’ bar and public adjusters knocking on doors,” Adams said in response to a question about reasons behind the level of attorney representation.

Claims from Hurricane Ian, which hit southwest and central Florida almost a year ago, continue to be filed at the rate of 150 to 175 per week, Sakraida said.

That’s not normal and “should not be happening,” he said. “We saw the same with Hurricane Irma, not much with Hurricane Michael,” he said. Many Ian claims have come from southeast Florida, which was not in the direct path of Ian.

The number of late-developing claims will likely diminish this year and next as new laws have an effect, Sakraida pointed out. The Florida Legislature reduced the claim-filing deadline from two years to one.

The insurer also has seen some success in anti-fraud efforts. Joe Theobald, director of Citizens’ special investigations unit, touted the arrest of a homeowner, a public adjuster and a restoration contractor, all part of what he called an organized crime ring in Miami.

After an initial investigation by Citizens, the Florida Department of Financial Services investigators in August charged homeowner Jennifer Ann Perez, public adjuster David Caballero and the contractor with attempting to defraud Citizens of $136,000. The adjuster allegedly coached the insured and staged the home to make it look like recent damage, when, in fact, the water damage was pre-existing, officials said.