Florida Insurer Exploits Loophole to Win 90% of Disputes Without Court Review

Florida Home Insurer Skirts Courts, Wins Over 90% of Claim Disputes TALLAHASSEE, Fla. - In a system designed to favor consumers, Florida's insurer of last resort, Citizens Property Insurance, has exploited a loophole that allows it to bypass the courts and win more than 90% of insurance disputes through mandatory arbitration. According to an investigation by ProPublica, between 2015 and 2020, Citizens took over 1,500 claims to binding arbitration, where it prevailed in 92.4% of final hearings. In contrast, when these same cases were litigated in court, Citizens won just 52.3% of the time. "This is a clear example of how the system can be manipulated to favor one party," said State Rep. Evan Jenne (D-Hollywood), who has been critical of the mandatory arbitration process. "Citizens is essentially getting a free pass on disputes that should be resolved in a fair and transparent court setting." Mandatory arbitration was introduced in 2011 as a way to speed up claims processing and reduce costs for both insurers and consumers. However, critics argue that it creates an uneven playing field, where policyholders are forced to navigate a complex and often biased process. "Arbitration is supposed to be a neutral forum, but in reality, it's a rubber stamp for the insurance company," said attorney Michael Haggard, who has represented numerous homeowners in disputes with Citizens. "When you're up against a giant like Citizens, it's almost impossible to get a fair shake." Citizens officials maintain that mandatory arbitration is a faster and more cost-effective way to resolve disputes, but critics argue that it denies policyholders their constitutional right to a trial by jury. "The process is designed to be efficient, but it's also designed to favor the insurance company," said Jenne. "We need to take a closer look at this system and make sure it's serving the interests of consumers, not just insurers." The investigation has sparked renewed calls for reform, with some lawmakers pushing for legislation that would eliminate mandatory arbitration or provide greater protections for policyholders. As the debate continues, homeowners are left wondering if they have any recourse when their claims are denied. For many, the answer is a resounding no. Background: Citizens Property Insurance was created in 2002 as a not-for-profit insurer of last resort to provide coverage to Floridians who cannot obtain insurance through private companies. With over 1 million policyholders, Citizens is one of the largest insurers in the state. Mandatory arbitration was introduced in 2011 as part of a package of reforms aimed at reducing costs and increasing efficiency in the claims process. The system allows for binding arbitration, where a neutral third-party arbitrator makes a final decision on disputes between insurers and policyholders. Additional Perspectives: While Citizens officials argue that mandatory arbitration is a success story, some experts question its fairness and transparency. "Arbitration can be a useful tool in resolving disputes, but it's not a substitute for the courts," said University of Florida law professor, Michael Allen. "When you take away the right to a trial by jury, you're taking away one of the most fundamental rights of citizens." As the debate over mandatory arbitration continues, policyholders are left wondering if they have any recourse when their claims are denied. Current Status and Next Developments: The investigation has sparked renewed calls for reform, with some lawmakers pushing for legislation that would eliminate mandatory arbitration or provide greater protections for policyholders. As the debate continues, homeowners are left waiting to see if their voices will be heard. In a statement, Citizens officials said they were "committed to providing fair and efficient claims processing" and would continue to work with lawmakers to address concerns about mandatory arbitration. The story is ongoing, and ProPublica will continue to monitor developments in this case. *Reporting by Propublica.*