Citizens Insurance's controversial reinspection program sparks another lawsuit
Another homeowner has filed a lawsuit over Citizens Property Insurance Corp.’s controversial campaign to raise insurance costs beyond the 10-percent cap on rate hikes.
Stephanie Ritchie, of Tequesta, took her case to federal court this week, arguing that a Citizens’ home reinspection that resulted in an insurance premium hike was a violation of Florida’s Deceptive and Unfair Trade Practices Act.
Her class action lawsuit targets Mueller Services, one of three companies responsible for carrying out Citizens’ controversial reinspection program. Citizens is not named in the suit.
“To counter the impact on revenue of Wind Mitigation Credits, and effectively raise its premium rates at a time when the same were capped, Citizens and Mueller began re-inspecting homes that had not materially changed since the homeowner submitted their Inspection Form,” reads Ritchie’s lawsuit, which was filed in a West Palm Beach federal courthouse Tuesday.
“She lost all her discounts,” said Ritchie's attorney, Brian Smith, of Smith & Vanture, LLP. "They gave her seven days notice to pay."
Ritchie’s story mirrors one told by thousands of frustrated homeowners across the state, as Citizens and Gov. Rick Scott have pushed for a massive overhaul of the insurance industry.
In May of 2011, Ritchie paid for an inspection of her home, and received several discounts on her insurance premium after the certified inspector (approved by Citizens) found that she had taken steps to fortify her home against a storm.
The inspection was supposed to be good for up to five years, but in January 2012, Ritchie learned she would lose all of her wind mitigation discounts if she did not undergo a second reinspection.
After that reinspection. Ritchie’s insurance premium soared, as the Mueller inspector decided that the discounts approved by the first inspector were not valid.
Ritchie’s lawsuit claims that Mueller withheld payment to inspectors who failed to find that a homeowner should lose insurance discounts.
One former inspector told the Herald/Times Tallahassee Bureau that the inspection company he worked for (not Mueller) failed to pay him and several colleagues for their work, regularly rejecting their findings.
“Everything they do is to hide their shadiness,” said Mauricio Mesa, a former inspector of Citizens homes. “Smoke and mirrors.”
Citizens has conducted more than 250,000 reinspections, and in three out of four cases homeowners have lost discounts. That has resulted in more than $150 million in premium increases for homeowners, an average of $810 for those who lose credits.
Homeowners and consumer advocates have derided the inspection program, but Citizens has denied repeatedly that its inspection program was intended to raise rates
Last week, Citizens board member John Rollins said that many people were losing discounts because of rule changes instituted by the state, many of which make it harder to qualify for lower premiums.
He called Citizens simply “the bearer of bad news.”
Still, after immense public outcry about the pocketbook impact program, Citizens announced last month that it would make the reinspections more consumer friendly. The state-run insurer of 1.4 million announced plans to make it easier for homeowners to dispute the findings of their inspection.
Ritchie is hoping homeowners who dispute the inspections will join her class-action lawsuit, one of many spurred by Citizens’ rate hikes.
Another class action lawsuit filed earlier this year targets Citizens directly for the reinspection program, calling it a “subterfuge” to raise rates beyond the 10 percent legal cap.
Two New Port Richey homeowners filed a lawsuit in February against Citizens, claiming that the insurer was using a home valuation software to overvalue their homes and hike their premiums.
Citizens has denied the allegations.
UPDATE: Homeowners interested in the class action case may contact Ritchie's attorney at 800-443-4529. He is also investigating re-inspection reports from the other two companies - Inspection Depot, Inc. and Quick Built.