Citizens Insurance withdraws discounts for damage prevention

Florida Homeowners Insurance
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Florida Homeowners Insurance

Home inspections for hurricane proofing efforts have led to several revoked premiums decreases.

Citizens Insurance has been visiting homes throughout Florida that have received a discount on their premiums based on their hurricane proofing efforts, and has revoked the price advantage for many whose preventative techniques are inadequate or nonexistent.

This has put the insurer under a great deal of fire.

Almost three quarters of the 225,502 homeowners who are covered by Citizens Insurance and that underwent the inspections have seen price increases based on the reports of the inspectors. That said, 7 percent of homes saw decreases in their premiums, and 18 percent experienced no change to what they pay every month.

The average Citizens Insurance inspection came with an increase of $598 per year.

At the moment, the state backed insurer is the largest property coverage provider in Florida. It has approximately 1.4 million active policies. Facing significant cost struggles, Citizens Insurance has been performing inspections to verify that the discounts that they have been offering homeowners based on efforts to prevent hurricane damage are actually accurate.

While many customers were found to have filled out their discount requests incorrectly, others had stated that they had made efforts that made them eligible for discounts, when those efforts had not actually been made.

There will have been approximately 138,000 more Citizens Insurance inspections by the end of 2012.

Many people in the state are suspicious of these inspections and are considering them a sneaky way for Citizens Insurance to raise premiums for customers more than the legal limit of 10 percent per year. The insurer’s own estimates have shown that its premiums have increased by a total of $137 per year based solely on the results of the inspections. Equally, it spent $35 million to have these investigations performed.

A spokesperson for Citizens Insurance, Christine Ashburn, explained that “The purpose of this program is not to circumvent the 10 percent cap.” She went on to say that “Citizens provides $1 billion in credits annually to its policyholders. It is imperative that we only provide credits for policies which actually contain the wind mitigation features.”

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