A System Broken

Something’s been gnawing at me lately and this past Tuesday, I was able to see it in action first hand. I attended the Citizens Property Insurance Forum held at the Dadeland Marriott in Miami Florida. It was sparsely attended, which gave me the opportunity to have some one on one time with a senior Citizens claim management person. I had originally intended to got there and express my clients frustration with the Citizens claims process, but considering the paucity of participants it seemed more productive to discuss these concerns privately.

What I can tell you from this private meeting is that the claims handling procedures in place at Citizens are profoundly dysfunctional. I have mixed feelings about this dysfunctional condition. On the one hand, I want to fix it so that the policyholder benefits. On the other hand, Citizens Property Insurance Corporation has become my Best Salesman. The policyholder who runs into the Citizens brick wall is forced to seek the assistance of a Public Adjuster or Attorney to help them resolve their issue. The Public Adjuster resolves the matter through appraisal and the Attorney files suit. The claim gets settled and the policyholder while not particularly happy is paid.

Now here’s the irony: Citizens is not happy with the outcome of the appraisals and they are not happy with the outcome of litigation. Profoundly unhappy might be a more apt description. And yet, as profoundly unhappy as Citizens is with both of these dispute resolution venues, they are not receptive to change. It is the classic Einsteinian definition of insanity: Doing the same thing over and over expecting a different outcome.

Here’s the Citizens claims adjusting process in a nut shell. We investigate the loss. We come up with a position. We proffer our opinion to the policyholder. The policyholder unquestionable accepts our position. Claim is closed. What happens if the policyholder disagrees? Simply put they are cordially invited to piss off!

Missing from this scenario is a key and fundamental aspect of adjusting: communication. Citizens’ believes it is the only party in the equation that is entitled to have any input into the claims adjustment process. This is little more than hubris.

And here we are, resolving claims through appraisal and litigation because Citizens is unwilling to listen, unwilling to talk out differences, unwilling to be flexible, unwilling to negotiate, unwilling to provide anything that even approximates customer service.

Now understand, they take this stance ostensibly because of governmental oversight to which they are supposedly subjected. I don’t buy that, because it ultimately implies that policyholder’s would have to got to their state representative to get claims paid and the representative has better things to do that mediate insurance disputes. A more likely explanation is that the majority of the time their position is simply unsupportable. Appraisal awards and litigation outcomes are evidence overwhelmingly supportive of this observation.