The resolution of claims through arbitration at the Florida Division of Administrative Hearings (DOAH) provides a well-established, impartial, and efficient process for resolving claims disputes, according to data provided to Citizens Property Insurance Corporation’s Board of Governors on Wednesday. 

Briefing Board members at their quarterly meeting, Citizens President/CEO and Executive Director Tim Cerio said nearly 90% of disputed claims sent to DOAH since 2024 are settled voluntarily, with Citizens resolving more than a third of the disputes in the policyholder’s favor.

The DOAH process has also shortened the time it takes to resolve a dispute from nearly two years to less than 90 days, reducing litigation costs for policyholders and Citizens, Florida’s not-for-profit insurer of last resort. Lowering these costs leaves more in reserve to pay claims and reduce the risk of financial assessments on all Florida insurance consumers, most of whom are not Citizens policyholders. 

“As the state-created and not-for-profit insurer of last resort, Citizens has no financial incentive to not pay claims,” Cerio said. “Citizens has no shareholders looking to increase stock value or receive dividend payments. We have an obligation to pay valid claims and dispute those we determine to be invalid.”

In 2023, the Florida Legislature approved changes that allow Citizens to resolve disputed claims at DOAH instead of the state circuit court system. The reforms were part of a multiyear effort to reduce frivolous litigation, a major driver of higher premiums. Since 2022, Florida’s property insurance market has rebounded, with 17 new companies entering the market. Last year, Florida insurers had the lowest rate increase in the nation, at under 1%.

The number of claims referred to DOAH represents 1% of the 124,000 claims adjusted by Citizens in 2024. Before Citizens takes a dispute to a final hearing, the claim has been scrutinized at least six times by internal and external reviewers. This multilayered approach to evaluating claims before and during the DOAH process helps ensure Citizens is making the best decision possible.

“We take the denial of a policyholder’s claim very seriously,” Cerio said. “If at any time we believe we made a mistake, or we receive additional information to support a claim, we reverse our decision and resolve the claim with the policyholder.”

In 52% of disputed claims, the plaintiff’s attorney chooses not to proceed to a final hearing, a frequency that Cerio said confirms Citizens’ review process.

The move to refer disputed claims to DOAH has not been embraced by all. Despite numerous state court rulings upholding the process, Citizens’ ability to arbitrate claims at DOAH has been put on hold pending a challenge in a Hillsborough County state circuit court. Citizens is appealing the ruling.

Recent reforms, including the ability of DOAH to arbitrate claims, have been instrumental in the recovery of Florida’s property insurance market. Citizens expects to end the year with 516,000 policies, down 63.4% from a peak of 1.41 million in October 2023. Cerio said it is critical for stakeholders to hold firm to ensure that steps taken in the past few years to strengthen the market are not rolled back.

“These latest attacks on the fairness of DOAH are simply one part of a larger strategy to undermine the legitimacy of reforms that, without question, brought Florida’s property insurance market back from the brink of collapse,” Cerio said.