Citizens Insurance offers to settle 6,500
Hurricane Irma lawsuits
Article Courtesy of The Sun Sentinel
December 8, 2018
State-run Citizens Property Insurance Corp. wants to
expedite the settlement of about 6,500 open lawsuits related to
On Wednesday, the company’s chief claims
officer, Jay Adams, said Citizens is offering to pay to have
appraisers review the disputes and forge resolutions.
And if those appraisers can’t agree, Citizens also will pay
for umpires to make binding decisions, Adams said.
Normally, Citizens isn’t so generous when it comes to paying
for dispute resolution.
Under current policy language, either side in a claims
dispute can request appraisal before entering litigation,
but both parties have to pay for their own appraisers. They
split the cost of an umpire if necessary.
Adams told the company’s Claims Committee on Wednesday that
he hoped 50 percent of about 6,500 qualifying suits could be
settled by the company’s offer.
Insurance companies send settlement checks to
Hurricane Irma victims with string attached.
So far, just 60 plaintiffs have agreed to accept the
offers, which Citizens started sending to plaintiffs’ attorneys in
mid-October, Citizens spokesman Michael Peltier said Wednesday.
Hurricane Irma, which hit in September 2017, spurred a 71 percent
increase in lawsuits against the company from January to October 2018
compared to the same period the previous year. The number of new suits
each month increased from an average 650 to 1,114.
Of the 6,500 open Irma suits, 84 percent involved a dispute over how
much money it would take to bring covered properties back to their
pre-loss conditions, Adams said.
The dispute isn’t over whether Citizens is responsible for covering the
loss. Rather, these are cases where the company has already made
payments later deemed inadequate by the policyholder, or in which
Citizens said damage costs did not exceed the policyholders’ hurricane
deductibles and thus resulted in no payment.
Just as a majority of lawsuits before Hurricane Irma were filed by
Citizens’ South Florida policyholders, so were the Irma suits.
Eighty-nine percent of the 6,500 open Irma suits originated from Broward
and Miami-Dade counties, Citizens data shows.
The company has long pointed to the three South Florida counties — home
to 51 percent of Citizens policyholders — as responsible for a
disproportionate amount of claims and lawsuits.
Asked by the Claims Committee chairman whether he thought the company
would reach its 50 percent goal, Adams replied, “Based on the activity
we have seen so far, 50 percent seems high.”
The chairman, Gary Aubuchon, said, “that’s disheartening, don’t you
think, when we’re trying to do the right thing?”
But two high-volume plaintiffs’ attorneys, asked by the South Florida
Sun Sentinel about the offers, said taking them wouldn’t be in their
clients’ best interests.
Joe Ligman, of Ligman Martin PL in Palmetto Bay, said umpires too often
want to split the difference. “So if they’re offering $5,000, and we say
it will take $100,000 to make the repair, we’d have to accept half of
that.” Ligman said he represents clients in 50 cases for which Citizens
has made the offer, and he hasn’t recommended that any of them accept
Imran Malik, an Orlando-based attorney who filed 77 suits against
Citizens between January and October, said Citizens should have avoided
the need to propose settlements by making fair offers before disputes
ended up in court.
“Is this an acknowledgement that Citizens has not properly adjusted
claims in the first place? That’s a question that will be answered
through the litigation process.”