Citizens Settles With Policyholders Over Sinkhole Repairs

Mar 12, 2014

Citizens Property Insurance has reached a settlement with some 300 policy holders over sinkhole repair coverage. Officials say they’ll pay underground repairs in full.

In a conference call Wednesday, Citizens officials announced they’d reached an agreement with policy holders suing them for not repairing damage to homes caused by sinkholes. The public insurer originally wanted to conduct the repairs directly but officials have since announced customers will have the option to choose from a preapproved list of contractors after getting an assessment from a certified engineer. Citizen’s general counsel Dan Sumner told board members the settlement would help avoid around $30-million in total litigation costs for all parties involved.

“Our message to policy holders, to their counsel and to the courts is that if there’s a confirmed sinkhole, we are wanting to repair the home. We do not want to write a blank check but, we do want to repair the home. And if that can be done without the protracted cost of litigation to everyone, that’s what we want to do,” Sumner said.

Sumner also said Citizens will pay the law firm representing most of the litigating policy holders $2-million for legal fees already incurred. No one has said how much the settlement will cost the insurer in the long run.