As Florida’s Citizens Property Insurance continues…
to struggle beneath the crushing weight of debt, the state-run company’s policyholders are mobilizing for a massive lawsuit against the company. Consumers have filed a class-action lawsuit against the company this week in Tallahassee, Florida. Consumers are joined by Senator Mike Fasano, who believes that the company has been too bullish in its implementation of rate hikes. This is the same issue being brought to light by the lawsuit.
Consumers claim that the company is overestimating the value of homes and thus driving up premiums more than is necessary. The complaint centers on the company’s use of the 360 Value Software, which determines property values. In response to the lawsuit, Citizens has announced that it will no longer be using the pricing system but will not back down from enacting higher rates for homeowners insurance. The company holds to the claim that higher premiums are needed due to Florida’s penchant for natural disasters and the recent rash of fraud throughout the state.
Part of the problem stems from the recent crisis that struck the residential sector of the U.S. When the economic recession took hold of the country in 2008, many people saw the value of their homes diminish significantly. Although, industry professionals state that the real estate value is totally different than the insurance to value estimation, citing construction and material costs – not resale value. Even still, consumers in Florida claim that the coverage amounts are still too high and are worried that homeowners insurance may soon become too expensive and that they will no longer be able to afford the coverage that they need.
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