VERO BEACH, Fla. — Florida homeowners forced into arbitration with Citizens Insurance face judges whose salaries are funded by the very company they're ruling against, court records obtained by WPTV reveal.
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In 2023, the state-run insurer added mandatory arbitration clauses to policies, forcing policyholders into a process where administrative law judges — not juries — decide claim disputes.
A contract between Citizens and the state's Division of Administrative Hearings (DOAH) shows the insurer funds these judges' salaries at about $250,000 per year, set to increase to $266,000 next year. The Florida Legislature approved the agreement in House Bill 799.
"I don't think it's constitutional at all," said insurance attorney Aaron Bass, who has no cases with Citizens but was shocked to learn of the arrangement. "Judges take an oath to uphold the law, to follow the law and to be impartial, but judges are human. I don't see how they can divorce their humanity from the fact that most of these administrative law judges need to pay their mortgage, pay for groceries."
According to a Citizens Board of Governors meeting, more than 1,000 claim disputes had been sent to DOAH over the past two years. About half of those, 517, were fully resolved.
Data from Citizens shows 37% of those cases ended in "favorable settlements" for the policyholder. Just 11% went to a final hearing.
WPTV read through a full year of final hearing cases from May 2024 to May 2025 and found that of the 54 cases that weren't settled and went to a final hearing — with both sides presenting evidence — judges sided with Citizens in 53 out of 54 of them — 99%.
"You would think it would be 50-50, but it isn't," Bass said. "It is almost an existentially disproportionate number of losses for homeowners versus wins for homeowners. Just absolutely crazy."
In one motion to vacate WPTV reviewed, a Pembroke Pines couple who sustained damage from Hurricane Milton claimed the administrative law judge presiding over their case restricted their ability to present testimony and evidence, depriving them of a full and fair hearing.
Additionally, an analysis by nonprofit ProPublica found DOAH judges issued similar rulings in at least 20 other fact finding phases of disputes.
Citizens is Florida’s state-run insurer — a last resort for many homeowners who can’t find coverage elsewhere.
The company now holds the third-largest number of policies in the state, down from its 2023 peak, when it held 15% of the market and ranked number one.
Homeowners caught in limbo
Glorida and Jason Nitch of Vero Beach have been waiting more than a year for a final decision on their insurance claim after an EF-3 tornado damaged their home ahead of Hurricane Milton. Their roof has been leaking ever since, with the ceiling separating and creating gaps along the walls.
Citizens denied their claim in a May 15 letter, blaming "wear, tear, and age-related deterioration." But a private engineer's report the couple paid for found the tornado caused more than $65,000 in damage.
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"We gotta fix this! Or it's going to crumble down around us and we're not going to have anywhere to go," Glorida Nitch said.
The couple hired attorney Meredith Truen with HL Law Group, but their case went straight to arbitration — a process they had no say in choosing.
"I didn't know that until you told me," Glorida Nitch said, when learning Citizens funds the judges. "I think it's extremely unfair."
"Did you have any idea this clause was in your policy?" reporter Kate Hussey asked the couple.
"No, no!" they responded.
Constitutional challenges emerge
The arbitration process is now facing legal challenges. In August, a circuit court judge issued a statewide injunction halting all Citizens arbitrations, siding with a Hillsborough County lawsuit that argued policyholders don't have a choice in the matter.
Attorney Joey Padilla, who is suing Citizens on behalf of his Delray Beach clients, denied coverage for damage last October, said the process strips away fundamental rights.
"I think they're stripping the Citizens insurance policy holders of their rights," Padilla said. "They have a right to a trial by a jury, and this is forcing their hand."
Nearly 400 Citizens cases are now on hold while courts question the arbitration clause's constitutionality.
Citizens defends the process
Citizens defends its arbitration system, saying it saves time and money, while cutting down on frivolous lawsuits. The insurer's data shows arbitration costs average about $7,600 compared to more than $20,000 in state court, with resolution times of 85 days versus 622 days in court.
A Citizens spokesperson said policyholders "impacted by the new arbitration clause" were "notified of those changes before renewal" and noted Florida law "prohibits any adverse employment action" based on a judge's decision.
The insurer also noted that while one judge is questioning its constitutionality, many other judges have previously ruled Citizens' arbitration process is legal and should continue.
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Citizens CEO Tim Cerio said in a press release that 90% of claims sent to the Division of Administrative Hearings since 2024 were settled voluntarily.
However, court documents suggest policyholders may feel pressured to settle. In cases where homeowners lose, Citizens can demand reimbursement of attorney fees and costs that could reach $10,000 to $20,000, Bass said.
Of the cases that were resolved, Citizens data shows more than half of policyholders settled with "nominal or no payment."
"Usually with Citizens, it's $500," Bass said. "We'll pay you $500, you have 30 days to accept this. If you do not accept it in 30 days, and we go to trial and we will prevail."
Waiting for resolution
For the Nitchs, the legal limbo means continued financial strain. Jason is on disability with a fixed income, and they can't afford out-of-pocket repairs.
"What are we going to do?" Glorida Nitch asked. "I'm on disability. I'm on a very fixed income."
Their attorney, Truen, said the case is "stalled indefinitely."
"Unless they have lots of money stored away to go ahead and make those repairs, they're in the waiting game," Truen said.
Citizens tells me their claims team is taking another look at the Nitchs' case. But for now, the couple continues waiting as their home deteriorates around them.
"We can't do it out of pocket," Glorida Nitch said. "And we can't win. How are you supposed to win? We didn't know when we signed up."
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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