Should citizens do more to help with future Florida flood claims? Is it possible?

Citizens Property Insurance Corp., Florida’s largest insurer, suspended policy obligations ahead of Hurricane Helene’s forecast, and a board member asked if the carrier could do more to help policyholders handle flood insurance claims because of the looming storm.

“My question is, how do we coordinate to help the citizens of Florida with their flood claims,” ​​board member Charlie Lydecker asked at Wednesday’s board meeting.

He noted that Helene, with its strongest part projected to make landfall near Florida’s Big Bend region Thursday evening, is likely to produce more claims from storm surge, rain and flooding than from wind damage. Citizens, like most property insurers, does not cover flood damage, but many Citizens policyholders are now required to carry flood insurance, which is most often provided by the National Flood Insurance Program.

Lydecker, CEO of Foundation Risk Partners, an Ormond Beach-based insurance brokerage, wondered if Citizens staff could help affected policyholders navigate the NFIP claims process. With the storm expected to move inland into the heavily populated Atlanta area by Friday, flooded Floridians could face a delay with FEMA, Lydecker said.

But Citizens Chief Insurance Officer Jay Adams explained that the agency that manages the NFIP, the Federal Emergency Management Agency, generally does not engage with wind carriers on claims. Typically, policyholders must provide a denial letter from the primary insurer, then file a claim with the NFIP, he noted. Insurers have 60 days to issue the denial letter.

“We may be able to provide the insured with an immediate waiver” so homeowners can move faster to deal with FEMA, Lydecker asked. “It seems like we’d be doing a good thing if we could provide something to make the bubble with FEMA go faster.”

Adams said the claims need to be investigated to determine how much damage to a property may be from wind and how much is from water. He added that there is nothing preventing a property owner from filing a flood claim on the day of the event, and FEMA staff may not have to wait for the primary carrier’s denial to begin the adjustment process.

The board took no action on Lydecker’s question, but asked staff to explore ways to speed up the process for policyholders.

Hurricane Helene can be predicted to bring stronger winds than Hurricane Debby, which hit the same part of Florida last month. But Citizens’ Debby claims the figures could give some indication of what to expect.

Adams and Citizens President Tim Cerio said Debby produced 2,778 residential claims for Citizens and 14 commercial claims through the end of August. About 1,950 of those were closed, with $6.2 million in compensation.

Data that was not included in Adams’ presentation will show that in September, another 1,508 claims were closed without payment, which could raise concerns for regulators. Adams noted that many claims were for flood damage discovered by citizens, and a number of claims were small, below the insured deductible.

About 18% of Debby’s claims were from policyholders represented by plaintiffs’ attorneys. But attorneys appear to be less involved in claims after Florida’s 2022-2023 legislative reforms, which removed some incentives for claims litigation. Citizens data released at Wednesday’s meeting shows that the share of Citizens claims that were litigated has dropped sharply, from 44 percent in 2015 to just 10 percent in 2023. That number is expected to drop further, Cerio said.

A warming market responding to justice reforms along with the citizen depopulation plan also appears to be impacting citizen exposure, Cerio said. State regulators have approved the elimination of 1 million policies this year; About 528,000 letters were sent to policyholders and 132,000 policies were picked up by private market carriers, staff explained.

Citizens will let agents know when policy binding can resume after Helene has passed.

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Florida claims flooding