Citizens Insurance offers to settle 6,500 Hurricane Irma lawsuits

Citizens Insurance offers to settle 6,500 Hurricane Irma lawsuits

Article Courtesy of The Sun Sentinel

By Ron Hurtibise

Published December 8, 2018

State-run Citizens Property Insurance Corp. wants to expedite the settlement of about 6,500 open lawsuits related to Hurricane Irma.

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 it.

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.”