Class action lawsuit filed against Citizens Property Insurance Corp
A class-action lawsuit has been announced against the state’s largest property insurer. Citizen’s is being accused of artificially raising home values in order to charge higher premiums. Lynn Hatter reports a group called the Florida Association for Insurance Reform, or FAIR, is backing the lawsuit.
Right now property insurance is based on the value and location of a home. The lawsuit brought against Citizens property insurance, claims the company used a software program that inflates the replacement value of a home in order to charge customers higher rates. FAIR’s regional director David Welch calls a back-door tax on property owners.
“They’ve done that by coming in and saying, hey folks, the property appraiser says your house is worth $70,000. We say your house is worth $140,000. So we’re going to charge you the rates for that $140,000.”
Last year the legislature refused a plan to allow Citizen’s to raise rates by 2,000- percent. The lawsuit claims the property insurer went out and purchased software called 360 value – allowing them to skirt the competitive bidding process and providing an alternative way to raise rates. A spokeswoman for Citizens says it has no reason to over-insure policy holders.