Senator Mike Fasano was contacted by Ms. Ruth Lauro of New Port Richey who was greatly concerned with her home’s cost replacement value as projected by Citizens Property Insurance Company (and the premium that was based on that projection). Citizens estimated that her home would cost $124,000 to replace. Ms. Lauro’s flood insurance company, Midland Mortgage Company, also based its flood premium on the Citizens cost replacement appraisal.
Senator Fasano hired a reputable private appraiser to appraise her home. Below is a copy of that appraisal which places her replacement cost at $89,158, almost 30% lower than Citizens’ appraisal. The appraiser reported to Senator Fasano that his projection was on the high side because he included demolition and debris removal as part of his cost projection. The appraiser also included two builders’ price sheets which strongly contradict Citizens’ projections as well.
Ms. Lauro is an 82 year old woman on a fixed income who will be economically devastated if the current premiums remain in effect. Senator Fasano previously sent a letter to Midland Mortgage asking for a reconsideration of Ms. Lauro’s premium. Armed with the new data supplied by the appraiser, Senator Fasano sent a second letter on January 5, 2012 to Midland. Additionally, Senator Fasano will be soon be sending a letter to Citizens asking that they immediately reduce her replacement cost estimate so that her insurance premium can be reduced as well.
Ms. Lauro’s situation is an example of a widespread problem facing Citizens policyholders who are finding themselves paying premiums based on extraordinarily high cost replacement estimates. In Ms. Lauro’s case her flood insurance premium is also inflated due to the fact that it was based on that faulty cost replacement estimate.
Senator Fasano has filed property reform legislation that includes a provision that Citizens must accept a private appraisal if it shows that the replacement cost is less than the replacement cost estimated by Citizens. This provision puts into statute a long-standing practice that Citizens recently dropped in what many have seen as a way to increase premiums.