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Florida’s insurer of last resort, Citizens, has expanded its efforts to curb increasing water loss claims with a new Water Mitigation Estimate Review Program.

Citizens Chief Claims Officer Jay Adams said the new program will provide Citizens with “certified and trained professionals to assess contractor expenses and/or invoices related to

Citizens’ Board of Governors awarded a contract of up to $1.8 million for three years to insurance claims servicing firm Lynx Services LLC, which will examine whether claim invoices associated with water damage are reasonable and adhere to industry standards. The actual amount of the contract will depend on the number of claims reviewed.

“The goal is to identify inflated or excessive charges on invoices from contractors that have performed water damage restorations for Citizens’ policyholders and to contest or adjust invoices so it comports with industry standards,” Adams said of the action item presented to the Board on July 19.

Citizens, as well as other Florida insurers, allege that unscrupulous contractors and water mitigation firms are taking advantage of the assignment of benefits (AOB) provision on insurance policies and inflating water damage claims. The problem has been dubbed by Florida industry and consumer advocates as an “insurance crisis” and has led to statewide rate increases for homeowners from multiple insurance companies, including Citizens.

The Lynx contract was approved unanimously by the five of eight board members who called in for the teleconference. The yearly spend for the contract is $365,813 and the estimated cost is a budgeted expense that is paid as an “Adjusting Expense” under the claim file. The contract also features two optional one-year renewals after the three-year base term.

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