New Investigation Shows How Florida’s Insurer of Last Resort Set Up “Alternate Legal Universe” to Deny Claims
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September 15, 2025
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New Investigation Shows How Florida’s Insurer of Last Resort Set Up “Alternate Legal Universe” to Deny Claims
Policyholders Lose 90% of the Time In Forced Arbitration Cases Decided By Administrative Judges Whose Salaries are Funded by Citizens Property Insurance Corp.
Today, ProPublica released an in-depth investigation by reporter Mario Ariza revealing how forced arbitration – “an alternate legal universe” – has allowed Florida’s insurer of last resort, Citizens Property Insurance Corporation, to deny claims and minimize payouts to policyholders.
As the story notes, Citizens wins 90% of the cases brought to arbitration, compared to just over half the time when cases are brought to court. Notably, in arbitration, the cases are decided by administrative law judges whose salaries are funded by Citizens.
“People pay into insurance policies year after year expecting that when an emergency strikes, their insurer will honor its commitment and pay up. They shouldn’t have to jump through hoops and have the deck stacked against them to get the payment they’re owed,” said TJ Helmstetter, spokesperson for the Insurance Fairness Project. “Lawmakers need to fix this broken process and start addressing the underlying causes of the insurance crisis, including climate change.”
Here’s one homeowner’s experience in the arbitration process:
Jeffrey McShane is a former Navy pilot and nuclear engineer. This March, as a lunar lander carrying a payload he helped design was using X-rays to observe the dance between Earth’s magnetic field and the solar wind, he was troubled by another concern: Was there any way to win against Citizens? [...]
“I did not expect that the technical difficulty of navigating Citizens’ claims process would be far more difficult than getting a spacecraft to the Moon,” McShane wrote in an email to ProPublica.
As his final hearing approached, McShane’s learned that his chances of victory were almost nonexistent. No homeowner, up to that point, had won a DOAH case against Citizens. The insurance company was offering him $5,000 to settle. At the last moment, he decided a final hearing was too risky and took the money.
ProPublica heard from more than two dozen plaintiff’s attorneys who said their DOAH cases settled for less than what a homeowner would have gotten in state court.
Last month, a judge issued an injunction against Citizens’ use of the arbitration system while a federal lawsuit that alleges the process violates constitutional rights is pending. Meanwhile, two additional lawsuits seek to void all rulings and settlements that stemmed from Citizens’ arbitration process.
“The use of forced arbitration pushes homeowners in crisis into a kangaroo court where they struggle to be treated fairly,” said Mekedas Belayneh, policy advocate with Public Citizen’s Climate Program. “By allowing the state-run insurer of last resort to pin policyholders into a rigged system, Florida lawmakers are letting industry insiders decide homeowners' financial fates.”
Meanwhile, the issue has garnered attention from Congress. Last week, Rep. Maxwell Frost sent a letter to Florida Gov. Ron DeSantis and other officials, including the state’s insurance commissioner, demanding answers.
“Caught up in these hundreds of cases that constitute Citizens’ near-perfect record with DOAH are constituents of mine who have suffered severe storm damage,” wrote Congressman Frost. “To add insult to injury, the arbitration process often leads to policyholders owing thousands of dollars to Citizens’ lawyers because Citizens is allowed to collect attorneys’ fees when they win in arbitration. ”
Read the full ProPublica story here.
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
