Citizens Property Insurance Corp. has been in the news recently and, unfortunately, not in a good light. The insurer is facing more heat over its system for valuating replacement costs for homes. Two groups have filed a class-action lawsuit against the state-run insurer, claiming that Citizens is using a software program, called 360Value, to overvalue the replacement costs of homeowners’ properties. The Plaintiffs, Florida Association for Insurance Reform and the Beausoleil Law Group of Florida, allege that Citizens has used the 360Value system to raise rates on homeowners and “side-step” the legislative process for rate-raising.
Citizens told agents last year that it would rely solely on its 360Value software for estimating the replacement cost of homes. The insurer said it would no longer take into account estimates from real estate appraisers or independent general contractors. That caused several complaints from homeowners who said their homes were being overvalued by the software. Citizens has now reversed course on that decision. The about-face came just days after a Tampa Bay Times story documenting seemingly high replacement cost values reached by 360-Value. The Plaintiffs are contending in the lawsuit that the giant insurer is using the system as a backdoor method to raise rates.
The following is from the class-action lawsuit website: “Citizens has been and wants to continue increasing revenue and reserves without having to fight the Florida legislature for a rate increase. They are literally sidestepping legislative action at the expense of the almost 1.5 million Florida taxpayers that are being forced to pay higher premiums because Citizens intentionally misrepresents property values.”
Source: Miami Herald
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