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Citizens clarifies policy language for water losses

MAITLAND, Fla. – Dec. 10, 2015 – Florida-owned Citizens Property Insurance Corporation’s Board of Governors approved a slate of policy changes to bolster oversight on Wednesday, notably to homeowner claims of water loss damage usually attributed to a broken pipe.
The recommended changes will now be forwarded to Florida’s Office of Insurance Regulation for approval.
The recommended changes are first steps, board members were told, to better control costs without jeopardizing customer service following a spike in the frequency, severity and litigation of water claims, particularly in South Florida.
“The bottom line is these policy changes and clarifications are necessary first steps to keep premiums as low as possible while protecting our policyholders who have legitimate claims,” says Barry Gilway, Citizens president, CEO and executive director. “However, they in no way fix the assignment of benefits cost-driver that must be addressed by statute.”
An “assignment of benefits” occurs when a homeowner empowers a vendor to make home repairs and work directly with Citizens for payment.
“Without these changes, Citizens would be forced either to take more draconian measures to curb costs or continue to raise rates,” Gilway adds.
Wednesday’s board-approved changes
Limit initial payouts for emergency services and temporary repairs prior to a report of loss to Citizens. Additional coverage for emergency services will be available following Citizens approval.
Exclude coverage of permanent repairs completed prior to a Citizens inspection of the damage.
Require that claims be reported within 72 hours of when a policyholder knew or should have known that a loss had occurred.
Set a limit for additional coverage to restore uniformity of appearance by matching repairs with adjacent undamaged areas.
Clarify language relating to the replacement of plumbing systems following collapse, blockage or deterioration.
According to Citizens, the cost of litigated claims is nearly three times higher than non-litigated claims. In 2014, the average litigated claims costs $27,631 compared to $9,028 for non-litigated claims.
If approved by OIR, the policy changes would take effect in mid-2016 for new policies and when they come up for renewal for existing Citizens policyholders.
© 2015 Florida Realtors®  
Source: Florida Realtors Feed

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