Make us your home page

Citizens Insurance hands out another no-bid contract

Under public pressure, Citizens Property Insurance Corp. backed down late last year on plans to award a no-bid $60 million contract for managing home reinspections to an inexperienced Jacksonville company.

Citizens, the state's largest property insurer, was forced to reduce the agreement with Inspection Depot to a pilot program involving no more than 1,500 homes and ending in March.

Citizens also promised to put the remainder of the work out to competitive bid, as required by Florida law. The goal is to reinspect up to 400,000 policyholders to make sure they qualify for wind mitigation credits, which cost Citizens $700 million a year in reduced premiums.

But in late April, just days before opening the competitive solicitation process, Citizens handed Inspection Depot another plum assignment: permission to continue the pilot program through the end of the year, performing up to 15,000 inspections each month.

At an average of $120 per inspection, the potential value of the contract is $12.6 million.

Inspection Depot, which retains $25 per inspection for its management services, could earn up to $2.6 million under the new agreement. The remainder goes to the people conducting the inspection.

A spokeswoman for Citizens said its board, which is supposed to approve all contracts over $100,000, had authorized the extension of Inspection Depot's contract as an "emergency" until the winner of the competitive bid is chosen. The long-term project is expected to start in 2011.

Competitors eager to break into the lucrative home reinspection business were outraged by Citizens' latest deal with Inspection Depot.

Frederick Bateman, a Tallahassee lawyer who has sued Citizens on behalf of SagoTec, a Georgia company, called the new contract, "flagrantly illegal and beyond egregious in nature."

"The only beneficiary is not the policyholder and not Citizens but Inspection Depot," he said.

Bateman and others also fear that the solicitation process now under way heavily favors Inspection Depot. Citizens is requiring that vendors have two years of experience managing inspections, which few potential bidders other than Inspection Depot have.

"Citizens has created a model for Inspection Depot, now they're asking who else has that experience," Bateman said.

Michael Rowan, Inspection Depot's owner, did not return a call seeking comment.

While Inspection Depot completed only about 600 reinspections through April — far short of the 1,500 allotted under the pilot program — Citizens said the effort was paying off.

Of 566 homes reviewed, 375 will have their premiums raised upon renewal because they did not qualify for wind mitigation credits. Citizens estimated the net impact, after paying Inspection Depot, would be about $350,000 in increased premiums.

Bateman said he never questioned the need for a reinspection program or the possibility of savings.

"They may be saving money, but not as much as they would have done if this had been a competitive bidding process," he said.

Kris Hundley can be reached at or (727) 892-2996.

fast facts

How reinspections will work

Once Citizens alerts a policyholder that it is reviewing his or her wind mitigation credits, Inspection Depot will schedule the reinspection, gather the results from the field, then use its software to compare the new results with the original inspection. Discrepancies could result in loss of all or part of the policyholder's credits. Any impact on credits would take place at policy renewal time, and homeowners would not be responsible for repaying any credits incorrectly granted in the past.

A homeowner who disputes the reinspection would have the right to pay for yet another inspection, which would then be reviewed by Citizens. If the homeowners' documentation prevails, they would be reimbursed the cost of the inspection.

Citizens Insurance hands out another no-bid contract 05/24/10 [Last modified: Monday, May 24, 2010 10:49pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  2. New owners take over downtown St. Petersburg's Hofbräuhaus


    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.

  3. Boho Hunter will target fashions in Hyde Park


    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  4. Gallery now bringing useful art to Hyde Park customers


    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  5. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers



    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]