Homeowners insurance discounts wrongly denied

Homeowners insurance discount costAn administrative judge has ruled that the discount forms used by the state’s property insurers are flawed.

In a ruling that could potentially rock the entire homeowners insurance industry in Florida, an administrative judge has deemed the forms used by property insurers throughout the state for the calculation of premiums discounts to be highly flawed and that they must be completely rewritten.

The decision from the judge could lead to massive implications for policyholders in the state.

Many residents of Florida have made special efforts to hurricane proof their homes and properties so that they can receive homeowners insurance discounts for wind mitigation. Moreover, Citizens Property Insurance Corp. had used those forms to remove the discounts that had been received by thousands of customers, following a massive re-inspection program.

A flawed decade old study is being blamed for the faulty homeowners insurance discount forms.

The study was commissioned by the Office of Insurance Regulation (OIR) ten years ago and, as it turns out, could have led Florida homeowners insurance customers to be denied multimillion dollar discounts for garage doors, when they should have been entitled to receive them. This could mean that many thousands of people in the state may be affected.

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The case is the result of a suit against the OIR by a small business owner in the state named Jack Stumpff, who has now had the forms successfully thrown out by the judge. That said, while there could be widespread impact from the ruling of the judge, it is still unlikely that homeowners insurance premiums will be changing in the very near future. This is because the case is not entirely complete.

The OIR is now appealing the ruling within a circuit court and is stating that the actual potential impact on the homeowners insurance premiums that are paid for any individual policy is negligible. According to the general counsel of the OIR, Belinda Miller, “I don’t think that people need to be concerned that they have lost a substantial amount of discounts for this.” Citizens has said that it intends to wait for final rulings from the appeals before making any decisions.

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