Miami-Dade County accounts for 19 percent of the policies at state-run insurer Citizens but 67 percent of the lawsuits over water damage and other claims besides sinkholes, a report released Monday shows, though the company and opposing lawyers disagree on what that means.
Some parts of the company’s report refer to the “tri-county” area of South Florida as producing most of the lawsuits, meaning Miami-Dade, Broward and Palm Beach counties, though a close look shows Palm Beach County has 10 percent of Citizens policies but only 6 percent of the litigation.
Citizens said it spent $51 million defending lawsuits in 2012, up from $14 million in 2009.
“It is both in Citizens’ and its policyholders’ interests to decrease litigation,” the report concludes.
Attorneys who handle claims against Citizens and other insurers said litigation would not be a problem if Citizens paid claims promptly and fairly.
“The way to minimize litigation is to fairly adjust and adequately pay claims that homeowners and business owners make,” said Ely Levy, litigation partner at Militzok Levy in Hollywood.
“The buck stops with Citizens, ” said Chip Merlin, president of the Merlin Law Group with offices in Tampa, West Palm Beach and Coral Gables. “If they want the lawsuits to stop, they need to either pay legitimate claims or prove there is rampant fraud in one region of the state.”
Money spent defending litigation is expected to decrease somewhat to $37 million by the time 2013 ends, Citizens projects, partly because it has 1.2 million fewer customers than the 1.5 million of about a year ago.
Citizens officials stopped short of saying there are particular legislative changes they want, though Citizens general counsel Dan Sumner said initiatives to encourage mediation of disputes could be helpful. Also, Citizens president Barry Gilway has said the company is considering a pilot “managed repair” program in South Florida in 2014 to guide customers to certain certified repair vendors.
“We do not want to be litigating with our policyholders when it should be resolved through mutual agreement,” Sumner said.