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Citizens sued over $190mn in lost mitigation credits

Hollywood-based activist Patricia Asseff has sued the state-owned Citizens Property Insurance for "unfairly" seizing $190mn from Floridian homeowners, a court filing shows.

The state agency revoked discounts on nearly 270,000 Americans' policies after embarking on an "arbitrary" and "unreasonable" home re-inspection drive without prior notice, the Florida district court filing said.

Citizens was founded in 2002 as a lender of last resort to homeowners in areas at risk of hurricanes and flooding. It was set up to provide cover unavailable in the private sector.

It offers insured residents rating concessions if they can show they have installed fittings such as storm shutters, or other features that mitigate loss in a windstorm.

Floridian law mandates that discounts are available if customers fill out inspection forms that detail loss-mitigating measures.

The forms expire after five years. The suit alleged that prior to their expiry, Citizens launched an "indiscriminate" inspection campaign circa 2010 in order to exact more revenue from policyholders.

These criteria "diminished the quantity, value or strength of [the] policies; displaced vested rights and invalidated" the policies. In so doing, Citizens violated due process, according to the plaintiff.

The insurer's practice was not to conduct inspections but to rely solely on the mitigation forms to assess discounts, the filing said.

Citizens was authorised by law to use inspectors to verify forms before accepting them as valid. The insurer chose to forgo this statutory right when it issued policies to homeowners without conducting an inspection, the suit alleged.

Asseff, a Hollywood estate agent who also lives in Florida, sued on behalf of Floridian policyholders after Citizens rescinded her insurance discount.

Citizens had accepted her insurance form in 2009 and subsequently inspected her home using a newer version of the form.

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