Florida Chamber Citizens Property Insurance Infographic Shows Correlation of Inflated Water Damage Claims to Insurance Premium Increases Statewide
Jul 31, 2015
From G. Donovan Brown at www.NationalInsuranceNews.com
Click above to view full-size: The Florida Chamber shows how one dollar of Citizens Property Insurance premium is spent.
During a recent Citizens Property Insurance Corporation Board of Governors meeting, it was explained how each of the State-run insurer’s 2014 premium dollars were spent, prompting the Florida Chamber to publish an infographic depicting that information as part of a bulletin today, July 31, 2015.
In the bulletin, the Florida Chamber’s Director of Business Economic Development and Innovation Carolyn Johnson explained how Citizens’ data illustrates the issue of assignment of benefits-related fraud in claims, which drives up insurance rates statewide.
The infographic, which can be viewed full-size by clicking below, shows that more than half of every Citizens premium dollar in 2014 was used to pay non-hurricane claims and adjustment costs, and nearly one-third of every premium dollar was spent on water claims alone–suggesting that more than half of every premium dollar that Citizens’ policyholders pay is going toward non-hurricane claims in which benefits are assigned over to a third party and repairs are made without the insurer’s knowledge—often resulting in money being spent on inflated claims.
Ms. Johnson noted that inflated claims through assignment of benefits is not an issue unique to Citizens Property Insurance. Especially problematic in Miami-Dade County, the recent increase in the number of water damage claims found to be inflated has been directly attributable to cases in which a policy has been signed over to a third-party damage repair vendor that is also working with a trial lawyer. In these instances, the damages are repaired before the insurer can even adjust the claim. Invariably, the trial lawyer sues for additional damages beyond what was necessary.
The Citizens Property Insurance data shows that, on an average statewide basis, 33.1 percent of every premium dollar goes to pay water damage claims and their corresponding adjustment expense. In Miami-Dade County, however, 56.3 percent of every dollar is required for the same.
Although Florida has not been hit with a hurricane in 10 years, the increase in non-catastrophic claims such as water damage is credited with driving up rates, Ms. Johnson concluded.
To view this story on its original Web page, go to: http://www.nationalinsurancenews.com/florida-chamber-citizens-property-insurance-infographic-shows-correlation-of-inflated-water-damage-claims-to-insurance-premium-increases-statewide/