A federal lawmaker is demanding answers about Florida’s state-backed insurer’s claims dispute process, arguing the system unfairly benefits the carrier over policyholders.
US Rep. Maxwell Frost (D-Fla.) has requested detailed information from state leaders regarding Citizens Property Insurance Corp.’s mandatory arbitration requirements. The 10th District representative and ranking member of the House Subcommittee on Economic Growth, Energy Policy and Regulatory Affairs claims the current system heavily favors Citizens in disputes.
Unlike private insurance companies, Citizens policyholders can only challenge claims decisions through the Florida Division of Administrative Hearings (DOAH). Frost noted the division has ruled in Citizens’ favor in nearly every challenge brought this year.
The arbitration process stems from House Bill 799, enacted in 2023, which also included provisions for flood and condominium insurance offered by Citizens. Frost is seeking extensive documentation about the bill’s creation, including conversations about mandatory arbitration language, lists of consulted parties, communications from Gov. Ron DeSantis’ office, and records from the Florida Office of Insurance Regulation.
Citizens spokesperson Michael Peltier defended the process, stating DOAH has served state agencies for more than 50 years. He emphasized that disputes undergo at least six internal reviews before reaching the division.
According to Peltier, the DOAH provides a fair and efficient venue to hear these disputes and the statute authorizing its use by Citizens is constitutional. He noted cases typically resolve within 90 days, compared to two years in state courts.
“This is an important benefit to both parties because shorter cases cost less in attorney fees and policyholders get an answer on their claim much faster,” Peltier said.
Peltier reported that nearly 90% of disputes are resolved by the parties themselves, not hearing judges, with more than one-third of cases favoring policyholders.
“More often, the claim is voluntarily withdrawn by the policyholder’s attorney for little to no payment because the evidence does not support the claim,” Peltier said. “Of the cases that make it to a final hearing, the claim is often withdrawn at the final hearing for the same reason; there is simply not enough evidence to go forward with the case.”
According to BestWire, Citizens leads Florida’s homeowners insurance market with 14.84% of direct premiums written in 2024, followed by Universal Insurance Holdings Group at 8.10%.
What oversight is needed to balance insurer and policyholder rights? Share your insights in the comments below.
