Data presented during a recent Citizens Property Insurance Claims Committee meeting on Tuesday revealed that, since Senate Bill 76’s implementation in 2021, 75 percent of appraisals reached settlements below initial demands, while just 14 percent exceeded them.

This data indicates that the appraisal process, which focuses on specific loss amounts and incurs lower costs compared to litigation, is more cost-effective for insurers. It also delivers quicker resolutions, typically under 120 days, versus litigation, which can take over 460 days.

“The data suggests that the appraisal is clearly saving on our indemnity payments on the plaintiff disputes,” said committee member Jay Adams.

Under the legislation, policyholders are now required to provide a 10-business day advance notice, known as the Notice of Intent (NOI), before initiating a first-party property insurance lawsuit. This NOI must include a pre-suit settlement demand, offering a detailed breakdown of damages, attorney fees, and associated costs. Insurers, including Citizens, are obligated to swiftly investigate these disputes and respond within the same 10-business day timeframe. Furthermore, SB 76 introduced a fee-sharing system for plaintiff attorney fees and costs, encouraging a meticulous evaluation of case strength. Between July 1, 2021 and July 11, 2023, Citizens reports that it received a total of 14,754 NOI filings.

Tuesday’s presentation also drew attention to savings in defense fees and litigation costs, averaging $8,118 and totaling $23.9 million. When factoring in all litigation avoidance costs, the insurer has avoided more than $47 million due to the Senate Bill 76 legislative changes.

Citizens also noted a steady increase in NOI claims since the enactment of SB 76, particularly following the introduction of SB 2A in January 2023, signifying the full adoption of the bill’s provisions by policyholders. The committee further emphasized that the growth was a direct result of policies becoming fully subject to SB 76.

While SB 76 has predominantly yielded positive results for Citizens, it is important to note that the NOI process introduced by SB 76 does not offer a resolution framework for denied claims or policies with exhausted limits.

“The current Senate Bill 76 notice process does not provide a solution to claims that have been denied or the total limit of coverage has been exhausted,” said Adams.

In response to this limitation, Citizens has introduced an initiative, the Department of Administrative Hearings program, with the aim of expediting dispute resolution for denied claims and policy limit exhaustion. This program offers arbitration once the NOI process is concluded, with hearings expected to take place within 75 to 100 days and a final written judgment anticipated within 30 days following the hearing.