TAMPA, Fla. – Citizens Insurance, one of the largest homeowners’ insurance providers in Florida, is attempting to reduce their coverage limits and the way repairs will need to be handled according to an executive summary released by the company last week.
One of the major proposed changes in the summary includes reducing the coverage for water damage to a $10,000 limit for non-weather-related losses, unless the policy holder chooses to utilize Citizens new Managed Repair Program.
“Water damage claims can often exceed $10,000 in damage, especially if mold is found or a pipe bursts in a kitchen or bathroom under the cabinets, behind a wall, or under the slab,” said Dean Makris, an attorney and founding partner at Makris & Mullinax, P.A., a Florida law firm specializing in insurance claims. “To think that homeowners will no longer be able to choose their own emergency services mitigation company, or their own general contractor to complete the needed repairs to their homes is absurd.”
Additionally, under the new Managed Repair Program, Citizens is attempting to reduce the amount of coverage to mitigate the damages.
For example, when a home has water damage, the homeowner will typically need to bring in a company to stop the spread of water damage by temporarily installing fans and dehumidifiers, according to Makris.
Depending on the extent of the damage, drywall and ceilings may need to be removed to pull soaked insulation and allow the fans and dehumidifiers to properly dry affected areas. If mold is found, the emergency services company may also need to setup mold containment systems and mold filtration units. Citizens now wants to limit that coverage to the lesser of $3,000 or one percent of the building coverage, unless an adjuster approves additional water extraction.
“If you’re a middle-class Floridian and your home is insured for $250,000, that means the limit to mitigate the damage would be $2,500 or not to exceed $3,000,” Makris says. “To get any further water extraction coverage, it would have to be approved by their adjuster.”
Makris says, the new program would essentially ensure that Citizens handles the repairs process and cuts out independent emergency services companies and independent general contractors unless they are on their approved list of vendors. That means Citizens can dictate the prices they will pay out to those companies, which will most likely result in undercutting the true cost of services. Furthermore, public adjusters, who work for the homeowners to fight the insurance companies to payout proper coverage would also be side-stepped.
“Plain and simple, what this means for homeowners with Citizens Insurance, is that if they choose to try to mitigate and fix the problem on their own, they’ll receive no more than $10,000,” Makris said. “If they choose to go under Citizens Managed Repair Program, they’ll be shoved in a system, which will try to get the work done as cheap as possible without a true regard for the proper quality of the repairs. Ultimately, homeowners lose their right to protect their castle the way they see fit and by whom they see fit.”
Lastly, if a homeowner is going through a claim with an insurance company, Makris recommends to always seek further counsel.
“It’s extremely important for homeowners to seek additional help, whether they’re dealing with an insurance claim related to storm damage, roof leaks, water damage, sinkhole, fire, termites, vandalism or theft, they need to make sure they speak to an insurance claim attorney or a public adjuster,” Makris said. “If the homeowner doesn’t have someone who knows what they’re doing on their side, it’s quite possible that the insurance company will take advantage of them by undervaluing the loss or wrongfully denying coverage.”
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