Citizens Property Insurance Corp. racks up $100 million in legal fees in two years

9:06 PM, Oct 15, 2013   |    comments
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Tallahassee, Florida - Citizens Property Insurance Corp. is getting sued a lot more by its customers and the company is paying out huge amounts of cash on legal fees.

A new report shows Citizens paid more than $100 million in legal fees to defense attorneys in just the past two years.

The number of lawsuits doubled from 6,000 in 2010 to more than 12,000 last year when the state-run insurer paid $64 million in defense legal fees.

Most of the lawsuits have been filed in South Florida over water damage claims.

Miami-Dade County represents 19 percent of Citizens' policyholders, but 60 percent of the litigated claims come from there.

RELATED: Nearly 400,000 policyholders may move from Citizens 

Critics accuse Citizens of delaying payments on claims until it gets sued.

Spokesman Michael Peltier says the company is not deliberately dragging out claims.

"We're not seeing those types of litigation rates in other parts of the state so I don't think we're doing anything differently in say Tampa as we are in Miami-Dade. We've shown that over 90 percent of our cases are paid off without and litigation at all and it's curious that in other parts of the state we don't see such a high rate of litigation."

Peltier says Citizens spends less than two percent of premiums on litigation, but the company is working to lower legal expenses.

He says that's one reason Citizens conducted the litigation analysis. It wants to better understand what's driving those costs and how to get a handle on them.

"We're trying to work on things that will drop that number down. Obviously, any legal costs are something you don't want to have to pay so you try to keep those at a minimum and I think we're trying to work toward that goal."

The report looks back five years at legal fees and concludes Citizens has spent about $190 million in that time.

As defense counsel expenses have risen, so has the percentage awarded to attorneys. In 2009, three percent of a claims payment went for defense legal fees. This year the percentage is 10 percent.

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