In an interview, Lacasa defended the inspections program as a necessary initiative to verify that homeowners who are receiving discounts actually deserve them.
In many cases, inspectors have found discrepancies not because of fraud, but because the state has made rule changes that make it more difficult to qualify for discounts.
In 2010, the Office of Insurance Regulation changed the definition of a “hip-roof,” the pyramid-shaped roof style considered especially wind-resistant by experts. Previously, a roof whose perimeter was at least 50 percent hip-shaped was considered a hip roof. The rule change — pushed for by the insurance industry — required the roof perimeter to be 90 percent hip-shaped.
Thousands of homeowners have seen their discounts eliminated as a result of the rule change. Fair Insurance Rates in Monroe, a Florida Keys-based group, has bashed the change as “arbitrary” and “another end-run around the 10 percent premium cap increase.”
For Temple, the combination of the roof rule-change and the reinspection resulted in her losing $1,326 worth of discounts.
Temple’s roof is mostly hip-shaped but also has a small flat portion covering a screened porch between her kitchen and backyard. She said an inspector came to her house and determined that the roof over the screened porch disqualified her from receiving a “hip-roof” discount.
She later hired a private inspector to help her appeal Citizens’ decision.
“We do find a lot of discrepancies with Citizens’ inspections,” said Andres Diaz, an architect with A-1 Engineering Inspection Services, which handled Temple’s private inspection. “They’re doing about twice as many inspections each day as you would expect, and there’s no possible way they can do it right in that amount of time.”
Citizens’ new president, Barry Gilway, said the company has quality assurance measures to make sure reinspections are done correctly.
“The public perception of this program is critically important to us,” he said.
When an inspector cannot find evidence to validate the discount, the onus is on the homeowner to prove that they deserve the previously awarded credit. In many cases, if a homeowner can’t produce decades-old documentation showing that their home has certain wind-resistant features, Citizens removes the discount, resulting in a premium hike.
Company leaders have openly stated that wind-mitigation discounts — which were doubled in 2007 under Gov. Charlie Crist — are an impediment to Citizens’ efforts to raise revenue. About half of all Citizens’ policyholders receive the discounts, with the aggregate total topping $1 billion per year.
“We have $3 billion approximately in direct premium today, but we’re leaving $1 billion of potential revenue on the table as a result of wind-mitigation credits,” Lacasa told Scott during a 2011 meeting.
The company recently expanded the inspection program to condo buildings, and plans to inspect thousands of buildings across the state.
As premiums rise, Citizens has also drastically reduced what it covers, leaving some homeowners more exposed.
Citizens has dropped coverage for carports and screened enclosures, reduced its personal liability coverage from $300,000 to $100,000 and is pushing to limit water damage claims to $15,000. Deductibles have also been significantly increased for several types of coverage.
Those and other changes have slashed billions of dollars from the insurer’s exposure, and will force homeowners to pay more if a hurricane hits.
Homeowners like Meredith Donly are wondering why their rates and deductibles keep going up, while the quality of their coverage declines.
Donly, who owns property in Hollywood, said the rate increase she got from Citizens this year was the last straw.
“I couldn’t even tell you what the bill is for this year,” she said. “I took one look at it, and I burned it.”
This article includes comments from members of HeraldSource, part of the Public Insight Network. To learn more about the network or to join, visit MiamiHerald.com/insight.