More than 90,000 times, Florida’s last-resort insurer Citizens and its contractors rejected reports from inspectors they hired to determine whether customers qualified for property-insurance discounts, an analysis of more than 225,000 inspection records by The Palm Beach Post shows.
The results have made homeowners furious. For some, annual premiums have
“This inspection process is a sham and an outrage,” said Harriet Golding of Palm
Beach. “They seem to be shaking down their customers and hoping people won’t
Citizens spokeswoman Christine Turner Ashburn said, “The only purpose of this
program is to make certain our policyholders receive the correct credits for the
storm damage mitigation features present on their homes.”
Three out of four homeowners have lost credits for building features that harden
homes against hurricanes, often raising bills far beyond the regular 1o percent
annual rate increases Citizens is allowed by law. The massive campaign has
affected about 250,000 homeowners, has raised premiums by more than $137 million
and is ongoing.
Gov. Rick Scott has pushed state-run Citizens to raise premiums, reduce
coverage, shrink its risk exposure and help drive customers to private
competitors. A lawsuit against Citizens by customers in Palm Beach and Broward
counties claims the reinspection program is a “subterfuge” to raise premiums,
alleging coordinators withheld payment to inspectors until they changed reports
to deny credits. Citizens denies the claims and has filed a motion to dismiss
the suit, which seeks class-action status.
In all this, the stakes are plenty big: Citizens, with 1.4 million customers
including 140,000 in Palm Beach County, is the state’s largest property insurer.
A majority of rejections are for “cosmetic” reasons to make sure the report is
clear, concise, easier to understand and properly documented, and are “often not
material to impacting whether a feature would be granted or not,” Citizens
spokeswoman Ashburn said.
Still, The Post found when supervisors rejected inspectors’ reports,
the outcomes weren’t 50-50, helping homeowners about half the time. They were
overwhelmingly bad for consumers.
Fewer than one in 10 rejections
resulted in lower customer bills — for instance, catching a discount the
inspector might have missed. After rejections, customer bills jumped an average
of more than $660 or almost 25 percent, more than average for the overall
program. Citizens calculates the overall average premium increase after 225,501
reinspections is $608.50, or or 23.9 percent.
The statistics appear to support what a former Citizens inspector in Palm Beach
County told The Post on condition of anonymity in a story published
Aug. 5. He said nearly half his reports were rejected, and consumers were left
worse off in virtually every case.
“I quit because of what I considered to be unethical practices,” the inspector
said. “I don’t think it’s the inspectors’ fault on this. Inspectors are being
told how to inspect it.”
Inspectors whose reports get rejected often lose compensation in the process,
sometimes 20 percent of an $85 fee. In more than 16,000 cases, both Citizens and
a contractor rejected reports for the same houses. Companies helping Citizens
carry out the program, including Inspection Depot Inc., Mueller Services Inc.
and Quality Built LLC, did not respond to calls for this story or referred
questions to Citizens.
Inspection reports can be rejected for reasons such as beomg incomplete,
incorrect or inconsistent with known features of the property, Ashburn said.
Poor photo quality, wrong or duplicate photos, or missing or inadequate
documentation are among a litany of reasons that can lead to a rejection, she
Citizens executives, acknowledging the program is “under fire,” announced Aug.
17 they are making some changes in the reinspection campaign. They will consider
further revisions at a board meeting Sept. 7. About 90,000 more reinspections
Chairman Carlos Lacasa, a former state legislator from Miami, said he is
sensitive to concerns about the program.
The company said it will suspend the loss of credits in cases where an inspector
says he cannot get into an attic to see roof features, and the customer can
request a free inspection when access is clear.
Customers will have 12 months after a Citizens inspection to request a second
free inspection if they make upgrades or disagree with the results. Citizens
also hopes to communicate better about why customers are losing credits and how
they can dispute the results.
But the Citizens board, which includes some members appointed by the governor,
often has been divided in votes affecting what customers pay and the coverage
Homeowners typically have no way of knowing when Citizens or a contractor
rejects an inspector’s initial report. They’re notified only of the final
Richard Miller and Gail Anderson of Lake Worth said they have no idea whether
their inspector’s report was rejected, but they were expecting a decrease in
their bill — not a whopping $1,779 increase. Their yearly Citizens premium
jumped 70 percent to $4,267.
“This is shocking to us because we have improved the home since we have been
with Citizens and expected a lower premium after the inspection,” Anderson said.
“We installed hurricane proof windows, hurricane proof garage door and R19 high
density foam in the attic. The inspector was very impressed with all our efforts
and left us with a very positive impression.”
In Palm Beach, Harriet Golding said her annual premium doubled to $16,000 after
a company-paid re-inspection.
“After the last round of hurricanes, I installed all new shutters, with the
approved markings, stating they met all codes,” she said. “Yet the inspector
somehow did not see the markings! Two years ago, I replaced my front door and
garage doors with hurricane approved doors, which I had inspected and paid for.
They passed the inspection at the time.”
She gathered the building permit for the front door and photos of her approved
shutters and was able to win back credits after a period of anguished struggle,
Staff researchers Niels Heimeriks and Andrew Maloney contributed to this report.