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Groups Asks State Officials to Block Potential Water Damage Cap

A group of Floridians are asking the state’s insurance over-seers to block a potential plan from Citizens Property Insurance to cap non-flood water damage claims at $15,000. The group said the proposal could violate  state law.

Florida’s largest insurer, state-backed Citizens Property Insurance, is looking for ways drop some of the millions of policies it holds and reduce its risk. One idea the company’s board members floated during a meeting late last week would cap claims for water damage not caused by floods at $15,000. Board Chairman Carlos Lacasa said water damage represents one of the company’s biggest claims areas.

“The reason, by the way members, that I wanted to bring back the sublimit on water, is because I think water is the next sinkhole, and I’m very very, want to be very vigilant about that,” Lacasa said.

But board members decided to set the issue aside, saying it warrants further study before a final decision is made. The board had heard concerns from insurance professionals and home owners who call the $15,000 mark an arbitrary number and point out it could really hurt some home owners. And Sean Shaw, the Founder of Policy Holders of Florida, raised similar concerns in a letter sent to the state’s insurance regulators.

"That is just an arbitrary number. People pay premiums so that they are covered in the event of a loss and that coverage is supposed to put them in the position of where they were before the loss, so if people have a water loss, that happens to cost $30,000, this arbitrary cap would only cover half,” Shaw said.

And Shaw said he thinks the cap could violate state law.

"There is a statute that says Citizens has to offer the same type of coverage that’s available in the general marketplace. And it’s our experience in our law firm that these types of 15-thousand dollar water caps are not what is generally offered in the market place in Florida,” Shaw said.

Shaw said since it’s not clear how soon the insurance company board plans to take the issue up again, he’s working proactively to bring the issue to state insurance officials attention before the board makes any final moves.

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Regan McCarthy is the Assistant News Director for WFSU Public Media. Before coming to Tallahassee, Regan graduated with honors from Indiana University’s Ernie Pyle School of Journalism. She worked for several years for NPR member station WFIU in Bloomington, Ind., where she covered local and state government and produced feature and community stories.

Phone: (850) 645-6090 | rmccarthy@fsu.edu

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