Citizens Raises Concerns with Lack of AOB Reform
Citizens Property Insurance Corporation’s president Barry Gilway and members of its board recently expressed concern that increased water damage claims and the “assignment of benefits” issue could adversely affect Citizens’ depopulation efforts. Water damage claims and the AOB issue are leading to rate increases, particularly in in South Florida where the issues are most prevalent. Citizens shared anecdotal information that private insurers are pulling back on writings, which likely will lead many of these policyholders with Citizens as their only option.
Gilway lamented the lack of reform in the 2016 legislative session. He said that despite the efforts of Citizens and others to educate policymakers about the issues, Citizens will attempt to do a better job going forward explaining the potential harm to the insurance industry. “I just don’t believe that we got the story across that this is a crisis, this is going to reverse all the improvement we’re seeing in the overall marketplace over the last two to three years,” Gilway said.
Citizens Board member James Holton suggested that perhaps the Governor should convene a “blue ribbon” panel comprised of insurers and attorneys to address the issue. Citizens also is pursuing filings with the Office of Insurance Regulation addressing water damage issues. Meanwhile, signs point to reduced private market options and higher prices for consumers, especially in areas of the state where water damage claims and abuses of assignments of benefits have been most prevalent.