Florida lawmakers enable Citizens Property Insurance to win most claims disputes

In summer 2021, significant changes were made to the dispute resolution process for insurance claims in Florida, specifically involving Citizens Property Insurance, the state’s insurer of last resort. Florida legislators granted Citizens the ability to enter mandatory arbitration, allowing them to bypass the traditional court system for claim disputes. Critics argued that this provision limited homeowners' recourse when claims were denied, as seen in a troubling pattern where judges consistently favored the insurer. Data revealed that over 90% of cases resulted in rulings supporting Citizens, causing many homeowners to settle for negligible amounts during the arbitration process. The process's structure raised issues, particularly around the inability for homeowners to voluntarily dismiss their suits without the insurer’s approval, which left them vulnerable to substantial court costs. Many plaintiffs found that settlements through the Division of Administrative Hearings (DOAH) yielded significantly lower compensation than traditional court cases. For example, the average settlement amount in DOAH was about $18,000 compared to $25,000 in the regular court. The implications of this situation were dire for policyholders facing denied claims. Several homeowners, such as the Kilfoils, felt compelled to settle for mere hundreds when faced with the prospect of incurring even higher legal fees if they continued to fight. It reflected a broader concern among plaintiffs' attorney about the fairness of the arbitration process, where it appeared homeowners were at a distinct disadvantage, leading to settlements that barely covered their losses. Legislators, including State Senator Jonathan Martin, highlighted that the changes were designed to benefit both consumers and insurers. However, the reality of the arbitration revealed a troubling trend where the interests of the insurer seemed to dominate the proceedings. Moreover, some homeowners were left with significant burdens even after withdrawing or losing their cases, facing additional financial strains due to court-ordered fees. Overall, the shift towards mandatory arbitration in Florida’s insurance disputes has raised alarms about fairness and access to justice for homeowners in a state prone to hurricanes and natural disasters.