TALLAHASSEE, Florida -- Citizens Property Insurance Corporation is facing a new lawsuit alleging the company deliberately inflated the value of its customers' homes so it could jack up their insurance premiums.
The Florida Association for Insurance Reform filed a class action lawsuit in Pasco County against Citizens and a software company on Tuesday.
The suit says Citizens uses a new kind of software, called 360-Value, to artificially inflate the value of a home. Then the company raises premiums to reflect the higher value.
The suit says Citizens has been using this practice for several years in violation of the law. It asks a judge to force the company to stop the practice and accept appraisals from other sources.
Eighty-two-year-old Ruth Lauro, who lives on a fixed income of $630 a month from Social Security, says Citizens' rate hikes are forcing her to live on rice and threaten her ability to stay in her New Port Richey home.
"They really did me in good, Citizens. They even upped my mortgage. It's over $500. I only get $630 from Social Security, so what do I have left? They increased my flood insurance from $400 to $800. I never had a puddle where I live, believe me. So I don't know what they're trying to do to me, but all I know is I can't survive if this is what they're doing. I lost my job. So I don't know what to do. Believe me. I wish they'd come to their senses and give the senior citizens a little thought. Help us. But I guess not."
Lauro went to Sen. Mike Fasano looking for help. She told him her house was appraised at $50,000, but Citizens raised that valuation to $129,000 to boost her premiums.
Fasano says it's unconscionable to treat someone like that.
"Shame on Citizens. Shame on the private companies for not going through the process, for using the ability to circumvent the law, raise their premiums on the backs of senior citizens like Ms. Lauro, like the working families throughout our state, 1.5 million policyholders throughout the state are being affected by an unconscionable way to show a replacement cost value on a home that's significantly higher than what the true value to replace that home is."
David Welch of the Florida Association for Insurance Reform calls Citizens' policy a backdoor tax increase.
"We're here to say enough is enough to Citizens and we are here to say that we want to see that reversed, we want to see it stopped, and we want to see the legislation followed as it was meant to be."
You can get more information on the class action lawsuit at www.citizensclassaction.com.