Florida Citizens Moves to Have Commercial Claims Disputes Decided by DOAH

Three years after Citizens Property Insurance Corp. made the unprecedented move to resolve many of its residential claims disputes through a state agency instead of through litigation, officials are now planning to send some commercial claims down that same path.

That will include condominium and other commercial residential coverage disputes, officials said at a Citizens Board of Governors committee meeting Wednesday. The board’s Actuarial and Underwriting Committee voted to start offering new endorsements to commercial policies, giving the insurer or the insured the option of having disputes heard by administrative law judges at the state Division of Administrative Hearings, known as DOAH.

DOAH was established years ago to hear appeals from businesses that have been cited by state agencies for regulatory violations, and to resolve some disagreements between agencies. In 2022, at the height of the Florida claims litigation crisis, the Citizens Board of Governors endorsed utilizing DOAH for residential claims disputes as a way to avoid courtrooms and reduce mounting claims defense costs.

The DOAH path has proved to be effcient and a time- and cost-saving measure, officials said Wednesday. Since July 2024, some 664 Citizens cases opened with DOAH have been closed. The average legal spending per case was $8,384, about 60% less than the average cost of cases that are heard in state courts, according to numbers presented at the meeting Wednesday. And cases are usually resolved much faster – in an aveage of 85 days as opposed to 621 days for litigation.

“DOAH moves quickly, so it forces sides to move quickly,” Citizen CEO Tim Cerio said. “And a lot of cases are settled on the eve of a hearing.”

But overall litigation numbers also have fallen precipitously, thanks to 2022 and 2023 legislative changes that ended one-way attorney fees and tamped down bad-faith claims against insurers, officials said.

“It’s irrefutable that the reforms have had a tremendous impact on the market,” Cerio said.

Citizens’ lawsuit numbers have dropped from 21,000 claims in litigation in 2022 to about 12,600 this year. The rate of litigated claims has fallen from almost 30% at the height of the litigation crisis to about 10% in 2024. This year, Citizens expects the percentage to be in the single digits, Cerio noted.

Despite the improving litigation trends, the DOAH route for commercial claims is still a smart move and will continue to reduce costs for the insurer and reduce resolution times for insureds, said Jay Adams, chief insurance officer at Citizens.

Officials at DOAH, now in the midst of an office move, were not available Wednesday to say if the agency has the capacity to hear more claims disputes.

Topics Florida Claims Commercial Lines