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A Times Editorial

Citizens' inspection deals leave a bad taste

Citizens Property Insurance Corp. still doesn't get it. Last year, the state-run insurer was forced to drop its plan to hand a $60 million, no-bid contract for managing home inspections to a private company with limited experience. Now it has cut another sweet deal with the same company to do thousands of inspections this year while the original contract is competitively bid. Want to bet who gets the contract when it is finally awarded?

Something does not smell right with Citizens' cozy relationship with Inspection Depot Inc., the Jacksonville software company coordinating the reinspections. The company's owner had another company that participated in the initial home inspection program but was dropped because of its quality assurance rating. Yet Citizens' board of directors handed Inspection Depot the no-bid contract worth up to $60 million last October by declaring an emergency to circumvent state law that normally requires all contracts worth more than $25,000 to be competitively bid. In the face of mounting criticism, Citizens backtracked and gave Inspection Depot a far smaller deal to inspect up to 1,500 homes while the original contract was sent out to bid.

But Citizens could not leave well enough alone. Last month, the board of directors cited another emergency, continued Inspection Depot's experiment through the end of the year and enabled it to perform up to 15,000 inspections a month. The contract could be worth $12.6 million, and the company could earn up to $2.6 million after paying the inspectors. It appears Citizens is tilting the playing field toward Inspection Depot even though the company only completed 600 inspections through April and even though Citizens already is being sued by one of the company's competitors. This cannot possibly be in the best interest of Citizens policyholders.

There is every reason for Citizens to be serious about identifying mistakes in initial home inspections that resulted in policyholders winning hurricane-mitigation discounts they do not deserve. The state program that encouraged homeowners to harden their homes against hurricanes was well-intended and successful. But the free inspections for homeowners that verified the work had been done and resulted in premium discounts were too often plagued by fraud or shoddy work. No one should be receiving discounts that are unwarranted and hurt Citizens' financial viability. That will eventually come back to hurt policyholders who would face huge assessments after a major hurricane.

But the end does not justify the means. In its attempt to set things right with the original home inspections, Citizens is going about it all wrong.

Citizens' inspection deals leave a bad taste 05/31/10 [Last modified: Monday, May 31, 2010 6:09pm]
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