Citizens Property Insurance Corp., Florida’s largest insurer, has suspended policy binding ahead of predicted Hurricane Helene, and a board member asked if the carrier could do more to help policyholders manage flood insurance claims from the looming storm.
“My question is, how are we coordinating to help the citizens of Florida with their flood claims,” board member Charlie Lydecker asked at Wednesday’s board meeting.
He noted that Helene, with its strongest side projected to make landfall near the Big Bend region of Florida Thursday evening, is likely to produce more claims from storm surge, rain and flooding than from wind damage. Citizens, like most property insurers, does not cover flood claims, but many Citizens policyholders are now required to carry flood insurance, which is most often provided by the National Flood Insurance Program.
Lydecker, CEO of Foundation Risk Partners, an Ormond Beach-based insurance brokerage, wondered if Citizens’ staff could help stricken policyholders navigate the claims process with NFIP. With the storm expected to move inland across the heavily populated Atlanta area by Friday, flooded Floridians could potentially face a backlog with FEMA, Lydecker said.
But Citizens’ chief insurance officer, Jay Adams, explained that the NFIP’s managing agency, the Federal Emergency Management Agency, does not generally engage with wind carriers on claims. Insureds usually have to provide a letter of declination from their primary insurer, then file a flood claim with NFIP, he noted. Insurers have 60 days to issue the letter of declination.
“Can we be in a position to provide the insured with a declination immediately,” so that homeowners can move faster to deal with FEMA, Lydecker asked. “It seems like we’d be doing a good thing if we provided something to get the ball rolling with FEMA quicker.”
Adams said that claims must be investigated to determine how much damage on a property may be from wind and how much is from water. He added that nothing precludes a property owner from filing a flood claim the day of the event, and FEMA staff may not have to wait for the primary carrier’s denial to start the adjusting process.
The board took no action on Lydecker’s query, but asked staff to explore ways to expedite the process for policyholders.
Hurricane Helene may be predicted to bring stronger winds than Hurricane Debby, which hit the same part of Florida last month. But Citizens’ Debby claims numbers may give some indication of what to expect.
Adams and Citizens President Tim Cerio said that Debby produced 2,778 residential claims for Citizens and 14 commercial claims, through the end of August. Some 1,950 of those of been closed, with an indemnity payout of $6.2 million.
Data that was not included in Adams’ presentation will show that in September, another 1,508 claims have been closed without payment, something regulators may raise concerns about. Adams noted that many claims were for flood damage, uncovered by Citizens, and a number of claims were small, below the policyholder’s deductible.
About 18% of Debby claims were from policyholders represented by plaintiffs’ attorneys. But attorneys seem to be less involved in claims after the 2022-2023 Florida legislative reforms, which removed some incentives for claims litigation. Citizens data posted at the meeting Wednesday show that the share of Citizens claims that were litigated has dropped sharply, from 44% in 2015 to just 10% in 2023. That number is expected to drop further, Cerio said.
A warming market responding to the litigation reforms, along with Citizens’ depopulation plan also appears to be having an impact on Citizens’ exposure, Cerio said. State regulators approved the takeout of 1 million policies this year; some 528,000 letters were sent to policyholders, and 132,000 policies were assumed by private-market carriers, staff explained.
Citizens will notify agents when binding of policies can resume, after Helene has passed.
Was this article valuable?
Here are more articles you may enjoy.
State Farm Posts Worst HO Loss Ratio Since 2011; Peers Recover: S&P 
As E&S Market Growth Hits New Heights, Some Risk May Be There to Stay: AM Best 
Canada’s Insurance Czar Has ‘Harsh’ Message About Climate: You May Have to Move 
Mutual Insurers Chase Rate Adequacy, Financial Strength Remains Strong: AM Best 
