Citizens insurance to check if rebuilding costs are inflating premiums

Tamara Cahill, a Citizens policyholder in Fort Lauderdale, applied for a discount for her home security system but instead her premium went up by 21 percent . (Carey Wagner, Sun Sentinel)

Citizens Property Insurance announced today that it's launching a review of software it uses to calculate rebuilding costs in light of complaints that the estimates are too high and triggering huge premium increases for some policyholders.

Citizens will pick properties in Southeast Florida and the Tampa area and compare rebuilding cost estimates generated by its contractor, 360Value, with those produced by a competitor. It will also have a general contractor estimate the rebuilding cost for each property selected.

"In light of publicly expressed concerns about some of the replacement cost valuations generated by 360Value, Citizens will supplement its normal contract monitoring to include a targeted review to validate the accuracy of 360Value outputs," the insurer said in a statement. "Citizens anticipates the completion of the review by late January 2012 and will continue to periodically review its replacement cost valuation tool as appropriate, to assure valuations are consistent with insurance industry norms."

A formal complaint was filed recently alleging Citizens inflated some rebuilding costs by more than double to raise premiums more than the 10 percent a year allowed and Sen. Mike Fasano has also called on Citizens to do something about it. South Floridians have reported the same problem with Citizens and private insurers.