Citizens Claims Committee Meeting Report: December 1

 

The Citizens Property Insurance Corporation (“Citizens”) Claims Advisory Committee (“Committee”) met on December 1, 2010.  To view complete meeting materials, click here.   

A summary of the meeting discussion is below:

 

Key Performance Indicators

According to annual key performance statistics, Citizens’ first notice of loss volume is expected to increase 18.6 percent for year-end 2010.  Compared with 2009, the specific causes of loss have increased as follows:

• Dropped object(s) 228.4 percent
• Water (all sub-causes) 34.7 percent
• Theft 31.5 percent
• Sinkhole 101.8 percent

New litigation assignments in 2010 have increased to date by 68.7 percent, while the total closed assignment count has increased by 18.7 percent since October 2009. 

Meanwhile, Citizens’ claims adjustment times have also improved during 2010.   Faster dispatch time was cited as a contributor to the improvement

Citizens’ pending claims inventories increased as of October 2010.  Strategies to address this trend and improve closing ratios are being addressed.

 

Vendor Relations Update, Independent Adjusting Services

As of November 5, 2010, there were 3,047 independent catastrophe claims adjusters in Citizens’ inventory, equating to about 99 percent of the overall contract commitment from Citizens’ pool of independent adjuster firms. 

In order to have that pool in place as early as possible prior to the 2011 Hurricane Season, training of these adjusters will be conducted in February 2011, four months sooner than in previous years.  Another 2,046 adjusters who may not have fully completed the credentialing process, but are licensed in Florida, are also available if needed to handle catastrophe claims overflow.

Currently, potential staffing needs required for claims up to $500,000 claims are being adequately met. 

A recommendation to hire a vendor for flooring valuation to be voted on at the next Board of Governors’ meeting was made.  In addition, procurement of vendors for the following claims-related services are in process:

• Appraisal
• GeoTechnical Engineering
• Commercial General & Executive Adjusting

To view additional information about these competitive solicitations, click here.

 

Non-Catastrophe Update

Citizens’ sinkhole-related claims volume continues to spiral upwards.

Over a 21-month period, claims have averaged 167 per month.  This average increases to 229 claims per month if only the last six months are reviewed. 

Citizens has participated in several recent sinkhole-related projects, working closely with the Florida Office of Insurance Regulation and the Florida Senate Committee on Banking and Insurance on the Florida insurer sinkhole data call.

Efforts are underway to staff a Citizens sinkhole manager position to provide additional oversight of related claims handing. 

Since the last committee update, six new Chinese drywall claims have been filed, bringing the overall total to 59. 

To date, five BP oil spill-related claims have been submitted, three of which are commercial and two residential.  All have been claims for loss of income or rent, not physical damage.

 

Catastrophe Update

During the 2010 Hurricane Season, several storms came close to Florida, but none struck here. 

Tropical Storm Nicole, which occurred during September 29 and 30, produced 677 Citizens claims.  Approximately $1.7 million was paid out for these claims, with another $800,000 being held in reserve.  To date, the closing ratio for Nicole-related claims is 96 percent.

 

Litigated and Disputed Claims Update

In its litigation and disputed claims area, Citizens has created three leadership positions designed to improve oversight and accountability.

A review of 1,094 new litigation assignments show the top three causes of loss and resultant litigation as water (42 percent), wind (30 percent) and sinkhole damage (14.5 percent).  Litigation drivers from a dispute perspective are coverage and causation (37.38 percent); damage disputes, scope and pricing (25.78 percent); and late notice (10.15 percent).

In his report, Citizens Claims Vice President Lance Malcom reported that recruitment is underway for a catastrophe assistant director, a claims consultant and a claims quality assurance manager.

With the Committee having no further business to discuss, the meeting was adjourned.

 

 

Should you have any questions or comments, please contact Colodny Fass.

 

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