Citizens occasionally has meetings to discuss the status of different claims they are dealing with. Sinkholes are usually the hot topic these days. During these meeting Citizens discussed several different aspects of the sinkhole claims. First, the volume of claims. It was disclosed that the number of claims received were down by 27% compared to last year. Citizens cited several reasons including fewer sinkhole policies outstanding, stricter underwriting guidelines and stricter application of claims handling practices (also known as not working with your insureds to resolve disputed claims and forcing them into the my way or the highway mentality). Citizens next discussed the new formation of sinkhole teams and the management associated. Somehow Citizens seems to believe this has helped to expedite claims.

Citizens also discussed its litigation strategy for claims in litigation. First, it was noted that Citizens has saved substantial amounts of money by avoiding the neutral evaluation process. Second, Citizens noted that it currently has 5,697 pending claims of which 1,534 are in litigation. This number has doubled since September 2011. I wonder why (see above discussion of not working with insureds to resolve disputed claims). Citizens then went on to discuss how it has invoked a legal strategy which includes several mock trials to determine what strategies win and lose with juries. Citizens expressed that it wants a winning strategy for all its lawyers that can win on all cases.Citizens General Counsel Dan Sumner even commented that winning these cases is not about the science but about the story and that Citizens needs to set some precedence. So you don't look at the science when you determine whether an insured has a valid dispute in a sinkhole claim.

Sounds to me like Citizens knew it was going to be in for a battle with its insureds and was going to make a bunch of its insureds go to trial before it even looked at the individual cases. If you want to take a stand, thats one thing, when you purposefully go pick a fight without even looking to see if the fight is necessary is another. This clearly shows that Citizens has taken an approach that it needs to protect itself and win litigation more than it does protect its insureds and pay valid claims or even evaluate a valid claim.

Finally, Citizens discussed the future of the claims. This of course means cases that fall into the new statutory language requiring structural damage. Citizens has had 385 claims filed under the new statutory language with 110 closed at this time. What I found most interesting with this is that the numbers show that out of the 110 claims that were filed and are now closed, not one was covered by Citizens. 68.5% were denied on no structural damage, 17% were withdrawn by the homeowners (possibly after some arm twisting and threatening words by the adjuster?), 8.5% did not end up having sinkhole coverage, 3.5% did not have damage to the primary structure and 2.5% had structural damage but no sinkhole found. Not one closed claim was ever paid by Citizens. Not a bright future for Florida homeowners and particularly Citizens insureds.

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