Insurance Horror Story

More on the Insurer of Last Resort

From a reader:

I have a very long winded account of the state of our state run insurance company that your readers might be interested in. Since it is the insurer of last resort - most of the homeowners in the area are forced to deal with them simply due to the age and construction of their homes and they could very easily end up in my position.

Thanks,

G. B.


My wife and I purchased our home in Seminole Heights back in March. As everyone knows, Citizens is the only homeowner's insurance that will cover houses of this age and construction. Why? Got me, these houses are built far more reliably than anything KB or Lennar is throwing up in the suburbs.

On May 31, we received a letter from Citizen's stating that our insurance would be cancelled effective June 17. The reason? The condition of our roof – described in the inspection report with the highly descriptive term "aging". The insurer of last resort in this state was canceling my policy over a vaguery.

As luck would have it, we'd already made arrangements to have the roof replaced – well, luck may not be the proper word for this situation. We took before and after pictures of the roof, provided them to Citizen's along with the work order and invoice for the roof by June 2 nd. Should be plenty of time and enough to show that the "aging" roof was no longer and issue, right? Oh no, the fun just begins at that point.

On June 5th I was told that I needed to provide a letter, from myself to Citizen's stating that the entire roof had been replaced. ?? Wouldn't the invoice and before and after pictures be adequate proof of that? So, I wrote a one-sentence letter stating exactly what they asked for and emailed it. June 6th, "we need a letter from the contractor stating that he replaced the entire roof". OK, now with a work order, pictures, invoice, and letter from myself they now need a letter from the contractor? What's next, a note from my mom? They received the letter via email on June 7 th.

On June 14th, I contacted my insurance agent – fully expecting everything to be cleared up. One would think that a full workweek since the last communication and every piece of proof that they requested provided to them post haste would be plenty of time to get this through the system. No No No No No, on the 14 th it was still in underwriting. On the 15th it was still in underwriting and the probable outcome was going to be that the case would not be settled by close of business on the 16th, leaving my policy to expire at midnight on the 17th.

Not to worry though, IF all of the evidence shows that I've replaced my roof, they'll reinstate the policy as if it had never been canceled. There was no possibility of extending the cancellation date, but I could rest assured that if everything came out OK, I'd be reinstated. Why do I not have a warm fuzzy feeling about that? What happens if my house burns down while they're still reviewing my policy and they feel that they need more evidence to support the fact that I have a new roof? "Sorry, I can't give you that, my house burned down, the roof is gone".

June 16th, neither of the letters that I emailed to Citizen's was signed, so they are therefore invalid and I will need to provide new copies with signatures. Providing new copies will not postpone the cancellation, but I still need to provide them.

So, it's June 17th, and I'm sitting in my uninsured home, considering what kind of damage control I need to do with my mortgage company to keep them from pushing their own, high cost/low coverage policy on me – or worse, foreclosure.

The worst part of all of this is that the only reason for this happening is Citizen's failure to act in a timely manner. Any item that they asked for, they received within 12 hours of the request. They have had all of the requested information in hand since June 7 th, yet could not manage to act on the situation. Why am I reminded of the employee of a State agency that I used to provide telecommunications service for, who's phone did not work for 3 months, but never reported it because it would mean more work for her once it was fixed? This is what happens when you let the state run a private company. The inefficiency is maddening.