Residents applaud the lawsuit against Citizens

A homeowners' lawsuit this week is turning up the heat on Citizens Property Insurance Corp. over a formula that some policyholders believe is inflating their premiums.

A proposal also is advancing in the state Legislature to govern how Citizens and its consultants calculate home replacement costs in customers' policies.

"Our motivation in establishing an accurate replacement cost valuation is to protect our policyholders and make sure they can restore their home after a catastrophic loss," Christine Ashburn said in a statement Tuesday as director of legislative and external affairs for Citizens.

"Any assertion to the contrary is simply wrong," Ashburn added.

Joe Frietas and other plaintiffs in the class-action lawsuit remain unconvinced. The New Port Richey resident challenged Citizens for hiring Xactware as a contractor without getting other bids. The lawsuit says the 360Value software can inflate replacement cost values.

"The replacement cost calculation is a significant problem," state Rep. John Legg commented after the lawsuit was filed.

"Citizens has stated they have changed their formula because of the wide disparity," Legg added. "Our office is working on language to prohibit this from occurring again."

Legg, a Port Richey Republican, has been complaining about this issue since June 2009 when he wrote a letter to Florida Insurance Commissioner Kevin M. McCarty.

Some residents, such as Allan Schwartz from New Port Richey, paid for private appraisals to appeal calculations from Citizens. The appraisal last year on his River Crossing home came in lower than Citizens' figures.

Schwartz had feared Citizens would throw out the private appraisal this year.

"Who's running the insurance companies?" Schwartz asked. "It seems Citizens is calling the shots."

Danette Kelly, a Holiday resident, contacted state Sen. Mike Fasano about her dealings with Citizens. She claimed more than $48,000 of coverage had been added to her policy before she complained. The figure was reduced to $10,700 of additional coverage that Kelly still did not want. She insisted the extra coverage should be optional, not mandatory.

Kelly told Fasano she winds up in tears every time she talks with company officials. People no longer will be able to afford to stay in their homes, she argued.

"Shame on Citizens for taking the American dream away from so many innocent people," Kelly wrote Tuesday in correspondence with Fasano, R-New Port Richey.

Jon Ruggeri, an independent insurance agent in Sarasota, also applauded Fasano and lawmakers who are trying to bring accountability to Citizens over replacement costs.

"I am all for the free market, but in the coastal areas such as the one you represent and where we are located, there are very few, if any, options for people buying a manufactured home," Ruggeri wrote Tuesday to Fasano.