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Citizens No-Bid Contract Questioned

December 22nd, 2009 by Mike Vasilinda

Citizens, the state-run property insurance company, is under fire for awarding a contract worth up to 60 million dollars without a bid. The contract is for home inspections that, as Mike Vasilinda tells us, could end saving taxpayers money in the event of a storm.

Citizens gives discounts to 400 thousand homes with hurricane shutters and other things that make the home safer. The cost of the discounts: 700 million a year.

The problem is that many homeowners arenít entitled to the discounts they are getting.

ďThereís up to an 80 percent error rate in the mitigation credits they have on file,” Christine Ashburn with Citizens Insurance said. “If even half, if 40 percent of those folks are getting credits they donít deserve, weíre talking hundreds of millions of dollars.Ē

To fix the problem, and by calling the situation an emergency, Citizens entered into a no-bid contract that could be worth up to 60 million dollars.

Competitors are crying foul.

ďThese facts and circumstances clearly indicate that this is not an emergency and itís simply Citizens, doing what it has done on numerous occasions, thumbing their nose at the statutes,” attorney Rick Bateman said.

A law suit has been filed to have the contract bid out.

What everyone does seem to agree on is that 8 out of 10 Citizens customers with mitigation discounts arenít paying enough and the inspections will fix that.

Why taxpayers should care is because every dollar Citizens takes in is one less dollar that will be assessed to everyone in the event of a big storm.

The question isnít whether the inspections are a good idea, but whether the no-bid contract rises to an actual emergency. And now that is apparently going to be determined by a judge.

Citizens Insurance says it is going to start with just 500 inspections to see if it is finding mistakes, and if so, what kind of mistakes in the discounts it is giving. Citizens says it will contact policy holders before an inspector shows up at their doorstep.

Posted in Business, Insurance, State News | 3 Comments »

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