A Florida Home Insurer Was Allowed to Bypass the Courts During Claim Disputes. It Won More Than 90% of the Time.

Last October, Peter and Linda Kilfoil returned from an overnight trip and found water pooling in the kitchen of their Fort Lauderdale, Florida, home. The pair couldn’t pinpoint the source of the leak and had a hard time getting a plumber. So Linda Kilfoil called their insurer, Citizens Property Insurance Corp.

The call was the beginning of the Kilfoils’ journey through an alternate legal universe set up by Citizens, a quasi-governmental insurer in Florida, to reduce its staggering legal costs. In this state-sanctioned world, the judges’ salaries are funded by Citizens, the rules followed in Florida’s circuit courts don’t all apply and the insurance company almost always triumphs.

It’s a legal landscape so fraught that a Tampa judge recently paused all its proceedings — twice. But that didn’t come soon enough to help the Kilfoils.

Citizens sent an adjuster to their home the day after they called. He couldn’t pinpoint the source of the leak either but suspected it was coming from a pipe that drained wastewater from the kitchen, he said later in a deposition. He snapped photos of the warped, soggy cabinets. A short while later, Citizens denied their claim, saying that the damage to their cabinets was consistent with a long-term leak, and that their insurance contract excluded coverage of such leaks — unless they were hidden.

Eleven days after the denial, the Kilfoils’ plumber found the leaking pipe in the home’s exterior wall. It had been spilling water into a recess between their kitchen cabinets and slab foundation, records show. The total cost of repair has come close to $40,000, according to Linda Kilfoil and construction estimates provided by her attorney.

The Kilfoils had permanently relocated to Florida from Long Island to enjoy retirement. But with Peter Kilfoil ill with prostate and skin cancer, his wife faced the prospect of handling repairs while tending to his health.

“I am a former physician,” Peter Kilfoil said in an interview from the hospital. “I’m not like some carjacker. They accuse me of letting that leak persist until it destroyed my kitchen.”

Just before Thanksgiving, the Kilfoils sued Citizens. Instead of going to circuit court, as most lawsuits against insurers would, Citizens routed their case to arbitration before the Florida Division of Administrative Hearings.

On the surface, the change of venue — made possible by a provision lawmakers empowered Citizens to insert at the end of most of its policies — didn’t seem like a big deal. Legislators and Citizens executives touted DOAH as advantageous for both consumers and the insurer. Cases in the forum tend to move faster, cost less and are decided by expert administrative law judges rather than juries.

But in practice, homeowners forced by Citizens into DOAH have trouble exercising key rights.

Judge Britney Horton kept the Kilfoils’ lawyer from deposing a Citizens adjuster, siding with the company after it argued it had already made another employee available and produced “all non-privileged facts.” The ruling deprived them of a fair opportunity to investigate the denial, according to their attorney. On at least 20 other occasions, DOAH judges have issued similar rulings during a dispute’s fact-finding phase.

In addition, some DOAH judges have denied motions requesting that they disclose any potential conflicts they might have as arbitrators. Some plaintiff’s attorneys say that has made it difficult to trust in the impartiality of their decisions.

And the forum’s rules make it impossible for homeowners to drop their lawsuit without Citizens’ approval, unless they withdraw their claim, a move that can lead to court costs and attorney’s fees if not filed early in the process. Some have felt forced to go to final hearings where they lost and ended up owing thousands to Citizens.

“You don’t have to be a rocket scientist to figure out something’s wrong,” said Chip Merlin, president of Merlin Law Group, a firm that represents insurance policyholders.

In a written response to questions about the homeowners’ experiences, Citizens spokesperson Michael Peltier defended the current process.

“We believe the statute authoring the resolution of claims by DOAH provides a well-established, impartial, and efficient process for policyholders, who no longer must wait nearly two years, on average, for a resolution of their claim,” he wrote.

When it comes to depositions, the forum is not “materially different” from Florida’s circuit courts, he added. And he explained that while homeowners are barred from dismissing their cases at DOAH — a move that might allow them to pursue the claim in circuit court — they aren’t blocked from withdrawing their claim, a more terminal maneuver. (Withdrawing, though, grants Citizens an automatic win and exposes homeowners to the risk of fees if it is not done soon after a case is sent to DOAH.) The company declined to comment on individual cases in litigation.

As of July 21, judges sided with Citizens in more than 90% of cases that made it to a final DOAH hearing where both sides presented their case, according to a ProPublica analysis of court records. (The steep odds were first highlighted by the South Florida Sun Sentinel.) In circuit court trials, Citizens has won about 55% of the time over the past five years, according to records released by the company.

Of the Citizens cases resolved at DOAH between March 2024 and July 7, 2025, 78% ended in a settlement, according to data released by the insurer. Half of all cases settled for $500 or less to the policyholder, according to that data. An additional 28%, according to Peltier, were settled by Citizens for an average of $30,000.

Citizens’ customers cannot opt out of DOAH. Eventually, the insurer intends to send more than 3,800 cases a year there, according to a funding proposal approved by its governing board last year. Since February 2024, it’s sent over 1,500.

A multitude of public agencies in Florida contract with DOAH, relying on the administrative law judges to resolve disputes. As part of that process, they pay the agency for the salaries of judges who decide their cases, though they don’t play a role in the hiring of them.

But the program will have to survive stiff legal challenges. The most successful so far comes from Tampa, where a circuit court judge in August reaffirmed a statewide injunction pausing DOAH hearings after a Hurricane Milton victim argued the company was violating his rights.

“Specifically, enforcement of the arbitration clause at issue compels insureds into a forum that lacks neutrality, discovery, motion practice, and meaningful judicial review,” Judge Melissa Polo wrote in her order.

Citizens moved to disqualify Polo, arguing that she violated her impartiality as a judge by ruling the DOAH process unconstitutional before arguments could be heard in the case. Polo denied the motion.

“We look forward to making our case on appeal,” Peltier wrote of Polo’s decision to pause DOAH proceedings.

As Florida’s insurer of last resort, Citizens must take all comers who can’t get affordable insurance through another carrier. It gained the ability to take disputes to DOAH in the spring of 2023, at a moment of great peril for the insurer. Successive hurricanes had gouged a hole in the Sunshine State, leaving several private carriers insolvent — and leaving hundreds of thousands of their customers with no choice but Citizens. By the end of that year, the not-for-profit insurer was serving more than 1.2 million homeowners as another hurricane season loomed. It also had more than 18,000 outstanding lawsuits filed against it.

The company successfully lobbied the Legislature to let it take cases to DOAH in order to buffer it against the crises. The verbiage granting Citizens this power was tucked into HB 799 — a broader Citizens bill that, among other things, allowed it to raise rates faster on some policies — just after its third reading in the Florida House of Representatives Commerce Committee in April 2023.

State Sen. Jonathan Martin, a Republican and one of the bill’s sponsors, said Citizens officials proposed the DOAH provision to him in a meeting in his Tallahassee offices. Former Florida State Supreme Court Justice Ricky Polston, who had just begun what would be a brief stint as the insurer’s general counsel, was present at the meeting, Martin said.

“He and Citizens expressed the risk that they were facing, just like all the other insurance companies out there,” Martin said.

Polston would leave Citizens that June to go into private practice. He now charges Citizens at least $500 an hour to defend it from legal and constitutional challenges, including ones to the DOAH proceedings, records show, and his firm has billed the insurer almost $430,000 this year. Polston did not respond to a request for comment from ProPublica.