A Hillsborough County Circuit Judge ruled in favor of a Florida homeowner on Friday after a state-funded insurance company argued the homeowner’s claims dispute should be moved to mandatory arbitration.
Citizens Property Insurance Corporation filed a notice to appeal that decision after a judge in the 2nd District Court of Appeal in Tampa issued a temporary injunction to block the company from sending disputes to arbitration at the Florida Division of Administrative Hearings.
This comes after the homeowner challenged the constitutionality of a mandatory arbitration clause imposed by the insurance company.
“State law specifically authorizes the Division of Administrative Hearings [DOAH] process, and we believe that the law is constitutional,” Michael Peltier, spokesperson for Citizens Property Insurance Corporation, said in a statement. “Beyond that, we do not comment on pending litigation.”
Erin Ross is a Fort Pierce homeowner whose home was hit by an EF-3 tornado in October, just before Hurricane Milton made landfall.
“At this point, given what we’ve gone through, I wouldn’t sign off on a policy that said that,” Ross said. ” I just wouldn’t.”
The twister demolished her roof, caused the garage door to detach, and even flipped her van over.
“This whole tornado thing caught everybody off guard,” Ross said. “No one was ready for this.”
She says it took a long time to get her own claim paid out by Citizens Property Insurance.
Though she didn’t pursue litigation, she says it’s nice to know a judge’s non-final decision gives policyholders that option for now.
“Every policyholder should be able to sue the insurance company,” she said.
Arbitration is a process that can be used to settle claim disputes absent of excessive legal fees, something both the insurer and insured can benefit from.
But critics argue the process favors insurers and makes it difficult for homeowners to get claims paid out.
“I understand why the insured wants to do this in the courts, for the reason, it wants to be in front of a jury,” Robert Goodman, Fort Myers-based attorney at Parrish & Goodman LLC, who is not involved in the Hillsborough County case, said. “I also understand why the insurance company doesn’t want to be in front of a jury.”
Goodman says homeowners have a pretty good shot at winning a lawsuit against their insurance company, especially if they can get the case heard before a jury.
“There’s a lot of people who’ve had bad experiences with insurance companies and builders and everything,” Goodman said. “So, when you get that jury, it’s sometimes easier to find a sympathetic juror. So, that’s why the big companies and the defendants don’t want to go to court.”
Citizens Property Insurance Corp. was created as a last resort for Florida homeowners and has become the state’s largest insurer, with over 780,000 policyholders as of Friday.
The judge’s ruling on Friday is not final, but it halts the company from enforcing its mandatory arbitration clause until an appellate judge makes a final decision.
