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A bill moving through the Florida House panel could change how disputes are handled for people insured by the state-run Citizens Property Insurance program. The proposal would stop Citizens from forcing policyholders into binding arbitration when disagreements arise over claims. Instead, arbitration would become a choice rather than a requirement.
The measure, known as HB 863, cleared the House Commerce Committee panel on January 21 with no debate. It was introduced by Rep. Yvette Benarroch, a Republican lawmaker and business owner from Marco Island. Supporters of the bill say it addresses a long-standing concern that many customers did not realize arbitration was mandatory when they signed their policies.
Citizens Property Insurance was created by the state to offer coverage to homeowners who cannot find insurance in the private market. Because it is backed by the state, its policies often come with different rules than those offered by private companies. One of those rules has been a requirement that disputes go through binding arbitration instead of the court system. Arbitration is a private process where an outside party makes a final decision that usually cannot be appealed.
Benarroch told lawmakers that many policyholders are unaware they are giving up the right to go to court when they accept arbitration. She said the bill does not ban arbitration but restores the ability to choose it. Under the proposal, customers could still agree to arbitration when buying or renewing a policy, but it would no longer be automatic.
During the committee meeting, Benarroch said the change is about fairness. She argued that people insured by a state-created company should not be placed into a separate system simply because of where they get coverage. The bill, she said, allows policyholders to decide how disputes should be handled rather than having that decision made for them.
A representative for Citizens attended the hearing and voiced opposition to the bill but did not speak at length or answer questions from committee members. No detailed explanation of the insurer’s concerns was given during the meeting.
Before reaching the Commerce Committee, HB 863 passed the House Insurance and Banking Subcommittee by a unanimous 17-0 vote on January 14. That early support suggests broad agreement, at least in the House, that the issue deserves attention.
A matching bill has also been filed in the Senate. The companion measure, SB 1716, is sponsored by Sen. Jonathan Martin, a Republican attorney from Fort Myers. As of now, the Senate version has not moved forward. It must still be heard by several committees, including Banking and Insurance, Appropriations on Agriculture, Environment, and General Government, and Rules.
If the bill becomes law, it could affect thousands of Florida homeowners who rely on Citizens for coverage. For many, Citizens is the only option in high-risk areas where private insurers have pulled back or raised rates beyond reach. Changing the dispute process could give those homeowners more control when disagreements arise after storms or other losses.
Supporters say the bill does not weaken Citizens or remove tools it can use to manage claims. Instead, they say it brings the insurer closer in line with private companies by giving customers the same basic choices. Critics worry that allowing more cases to go to court could raise costs, which could then be passed on to policyholders.
The proposal now heads toward a full House panel vote. Whether it becomes law will depend on how the Senate responds and whether concerns from Citizens gain more traction. For now, the bill marks another step in the ongoing debate over how Florida balances consumer rights, insurance costs, and the role of a state-backed insurer in a difficult market involving Citizens Property Insurance and oversight discussed by groups such as The Florida Bar.
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House panel advances bill ending mandatory arbitration for Citizens policyholders
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