The Claims Committee of Florida's Citizens Property Insurance Corporation has provided an interesting update on claims litigation during the first four months of this year.
As reported by the committee, from January 2019 through April 2019, Citizens was served with 3,333 lawsuits (3,259 residential property) – averaging 833 new lawsuits per month. This was a 22% decrease in the number of new incoming suits per month as compared to this same time period last year (2018 average for January through April: 1,071).
As of April 30, 2019, current pending volume totaled 14,091 lawsuits (13,629 residential property). This reflected a 14% increase in pending as compared to this same time last year (12,363 pending matters).
The committee also pointed out that 89% of the incoming residential property lawsuits arose out of the tri-county area, which has been fairly consistent since March 2014:
- Miami-Dade, 60%
- Broward, 24%
- Palm Beach, 5%
The committee said that the plaintiff was represented at First Notice of Loss (“FNOL”) in 62% of incoming residential property lawsuits, which was fairly consistent as compared to 2018:
- Public Adjuster, 35%
- Attorney, 26%
- Both PA and attorney, 1%
In 53% of the incoming residential property lawsuits the insured did not dispute Citizens' position or adjustment of the claim prior to filing suit.
A review of the timing of incoming lawsuits revealed that 32% of lawsuits were brought within six months of the FNOL. The committee said that this was a significant change as compared to 2018 (53%) as lawsuits historically were brought earlier following a catastrophic event. The committee said that the majority of new lawsuits, 51%, were brought six months to one year after FNOL, with 41% brought more than one year after FNOL:
- Within six weeks of FNOL, 1%
- Within three months of FNOL, 7%
- Within six months of FNOL, 24%
- Within one year of FNOL, 27%
- Within two years of FNOL, 33%
- Two or more years from FNOL, 8%
According to the committee, the leading cause of loss for new incoming residential property lawsuits remained CAT losses, which represented 48% of incoming lawsuits (down from 58% at the end of 2018). 32% of the CAT lawsuits were brought by the insured, with 16% brought by AOB vendors.
The committee added that, as time passes from Hurricane Irma, it is seeing a return to pre-Irma levels of AOB litigation that now represent 40% of new incoming residential property lawsuits, as compared to 26% for this same time period in 2018, and 40% in 2017. Water loss litigation also continues to rise and currently represents 24% of new incoming lawsuits (18% for this time period in 2018).
CAT losses also remain the leading cause of loss in pending volume, representing 43% of the pending for residential property lawsuits (compared to 41% in 2018). The overall percentage of pending AOB lawsuits has increased 4% as compared to 2018 and now represents 31% of the pending residential property lawsuits. Pending water loss lawsuits have decreased to 27% as compared to 36% in 2018.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].