Citizens’ Miscalculation Costs Policyholders
Recently, a great deal has been written regarding Citizens Property Insurance Corporation’s replacement cost value (RCV) calculation methodology. It seems that, in some cases, Citizens is grossly overestimating the cost to replace a home following a disaster. Consumer advocates decry this practice as nothing more than a backdoor rate increase following the denial of Citizens’ proposed 2000% rate increase a few short months ago. Predictably, insurance industry backers have called these increases necessary and appropriate.
While it is true that under the standard ISO homeowners policy homes must be insured to at least 80% of their value to avoid penalty, the current estimations seem unreasonable.
An article recently published in the Tampa Tribune cited such a case:
Joe Freitas thought $109,000 was a good deal on his new home. His