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Citizens said the policy contract changes (see below) were implemented to ensure that the use of emergency services is reasonable; that Citizens has the opportunity to assess the damage before additional permanent repairs are made; and that permanent repairs properly address the cause of the loss.

Specifically, the policy changes include:

  • In case of a loss to covered property, the revised policy contract requires policyholders to take emergency measures to protect insured property from further damage. Emergency measures only include what is reasonable and necessary to secure the home and prevent further damage, and may not exceed the greater of $3,000 or 1 percent of Coverage A limit, unless Citizens approves additional measures.
  • Second, to ensure that Citizens has the opportunity to inspect the damage and confirm coverage, the revised policy restricts when permanent repairs can begin. There may be no coverage for permanent repairs that begin before one of the following occurs: 72 hours after the loss is reported to Citizens, the loss is inspected by Citizens, or verbal or written approval is provided by Citizens. Note that these policy contract changes DO NOT require that a loss be reported within 72 hours.
  • Finally, when a home system (such as plumbing) suffers damage that causes a loss, Citizens has clarified that it will cover the access required to replace the part or portion of the system that caused the loss. Access to repair or replace parts and portions of the system not affected by the specific covered loss will not be covered.

The insurer said the revisions strike a balance between a policyholder’s need to make emergency repairs quickly and Citizens ability to control costs for all policyholders. The changes are needed, in part, to curb abuses involving assignment of benefits (AOB), under which policyholders give third party vendors the ability to control their claims following a loss, Citizens said. Citizens and other Florida insurance companies have warned the AOB problem with water loss claims is becoming a full-blown insurance market crisis.

“Protecting our policyholders after a loss remains the focus at Citizens,” said Chris Gardner, chairman of Citizens Board of Governors. “These changes will not affect our commitments to policyholders, but will help control costs, protect surplus and make sure we are ready when our customers need us most.”

 

Please enjoy the full article below!

http://www.insurancejournal.com/news/southeast/2016/05/10/408014.htm

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