A Spring Hill, Florida, resident is dealing with a state-backed insurer after his insurance claim was denied for nearly six figures.
Tom Luby told WFTS Tampa Bay 28 that Citizens Insurance twice denied his vandalism claim of nearly $100,000 at a rental property he owned. According to WFTS, the insurer said the extensive damage was due to “incomplete remodeling” of the home by the tenant, and not vandalism (1).
Property damage includes stolen and destroyed appliances, smashed floors and debris scattered inside and outside.
But under Florida’s insurance reform laws, Luby can’t take the insurance company to court. Because the company has rejected his claim twice, Luby says, he is now forced to mediate. He also said he had taken his case to three different lawyers and they all rejected him.
“They don’t want to accept it because you can’t win,” Luby said. “There’s nothing I can do.”
Critics are sounding the alarm about the new mediation process, in which claims against the insurer are routed to arbitration through the Florida Division of Administrative Hearings (DOAH), rather than being heard in Florida circuit courts.
According to a recent ProPublica investigation, lawmakers and Citizens said this change, approved in 2023, would speed up hearings and save money (2). The report notes that “some DOAH judges have denied motions requesting that they disclose any potential conflicts they may have as arbitrators.”
According to WFTS, Miami-based attorney Anthony Lopez, who represents Luby in the mediation, questioned the neutrality of the DOAH judges.
“The neutral arbitrators, the DOAH judges, are basically hand-picked by Citizens. Many of them are former defense attorneys who represented insurance companies,” Lopez said.
The ProPublica report found that in the more than 1,500 disputes that Ciudadanos has taken to mandatory arbitration, it won more than 90% of the final hearings. By comparison, the insurer won 55% of the time cases went to trial in circuit courts over the past five years.
The research also presented a disconcerting trend: Homeowners who try to drop their cases are unable to do so. DOAH rules are such that a case cannot be dismissed unless both parties agree. According to ProPublica, Citizens “routinely charges fees and costs to people who do not withdraw their claim in the early stages of the DOAH process.” A lawyer interviewed in the report characterizes the actions as “vindictive.”
In an interview with WFTS, Citizens CEO Tim Cerio defended the mediation process, noting that there is a six-step claim review before a policyholder is required to attend a hearing with DOAH, and, he says, of all disputed claims submitted to DOAH, 37% are resolved before the final hearing.
“We’ve tried very hard to get it right, and if we think we’ve made a mistake, we’ll go back and fix it. If we think we need to take a second look, we’ll do a second look, a third look,” Cerio said. “By the time the final hearing comes, we’ll be pretty sure of the outcome.”
After the interview with Cerio, Ciudadanos said they will review Luby’s case again, WFTS reported.
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If you are concerned about what your home insurance covers and whether a claim you file will be denied, there are steps you can take to protect yourself.
The first step you can take is to review your policy. Make sure you understand what exactly your home insurance covers and what it doesn’t.
Things that are often not covered include floods, earthquakes or landslides, insect or rodent damage, damage from war or civil unrest, normal wear and tear, and results of negligence, such as mold, rust, or a leak that you did not repair. If you are concerned about flooding or natural disasters, you may consider investigating whether you can purchase a separate insurance policy that covers these events.
In some states where wildfire risk is high, homeowners are finding it increasingly difficult to find insurance companies to cover their homes, as was widely reported amid the January wildfires that devastated parts of Los Angeles.
If you need to make an insurance claim and have verified that you are covered by your policy, be sure to also file the claim by the deadline stated in your policy; extensively document problems with photographs, videos, receipts you have collected, and any other evidence; and wait to make major repairs until an insurance adjuster has assessed the damage.
If your claim has been denied, you will need to contact your insurer and request that they reevaluate your claim. Be sure to document all communications with your insurer. You may need to take the step of filing an appeal; The process for how to file an appeal should be detailed in your policy.
You can also contact your state’s insurance department, which, depending on your state, may be able to help mediate your dispute, but may also help explain your rights to you.
There is also the option of hiring a public adjuster. A public adjuster works for you, the insured, as opposed to an adjuster who works for your insurer. Public adjusters charge a fee, which can be up to 15% of your settlement.
When hiring a public adjuster, check to see if they are required to be licensed in your state, check to see if your state’s insurance department has resources for finding a public adjuster, or search the National Association of Public Insurance Adjusters. Be sure to check their references and avoid anyone who tries to pressure you.
Check to see if your state sets the percentage a public adjuster can charge you. If you suffer a natural disaster, you have to be careful, warns the Insurance Information Institute (3), of public experts who go door to door offering their services afterwards.
We rely only on verified sources and credible third-party reports. For more information, see our editorial guidelines and ethics.
WFTS Tampa Bay 28 (1); ProPública (2); Insurance Information Institute (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
