Florida's state-backed insurer has the worst record on paying claims, according to a local ratings agency which says the majority are rejected.

Citizens Property Insurance Corporation denied almost 17,000 claims -- about 50.4 percent -- in 2023, the Tampa Bay Times reported, citing an analysis by Weiss Ratings, an independent ratings agency based in Palm Beach Gardens.

The rate of claims closed without payment was far higher than private insurers. The Florida subsidiaries of State Farm and Allstate had the highest rate among private insurers in 2023, with about 46 percent of claims denied.

Citizens was set up as an insurer of last resort for those who can't find coverage in the private market, but it has become Florida's largest home insurer as private companies have hiked rates and cut their business in the hurricane-prone state.

Florida homeowners recently told Newsweek they are being "ripped off" and put into financial difficulty as Citizens moves to cut the number of its policies. The company recently requested to raise premiums by as much as 18.1 percent in some counties.

Martin D. Weiss, the founder of Weiss Ratings who has long critiqued the insurance industry, told the Times that Citizens' rate of closing claims without payment has ranged from 40.2 percent to 50.5 percent over the past five years.

For Citizens Property Insurance "to be at the very top of the range is unforgivable," he said. "This is why I think a thorough investigation is urgently needed." Weiss has been contacted for comment via email.

Michael Peltier, a spokesperson for Citizens, told Newsweek that it "makes sense" that the company's nonpayment rates are higher than private insurers because of the kinds of properties it insures.

He also said the rate includes denials, but also duplicate and invalid claims and claims that were accepted but did not meet the policyholder's deductible. However, the company does not track the reasons why claims are denied.

"If you consider the policies Citizens typically covers, it makes sense that the nonpayment rates would be a few percentage points higher," he said. "We insure properties in the riskiest parts of the state and in some of its most flood-prone areas, including coastal areas where we provide wind coverage."

Many claims are denied because they are the result of flooding, he said. Citizens, like most private insurance companies, don't carry flood insurance.

About a third of claims closed without payment in the wake of Hurricane Helene were because the damage was due to flooding, according to data provided to Newsweek from Citizens.

"Also, while Citizens offers a comprehensive policy, we do not have the 'bells and whistles' that other private carriers may offer. We typically don't cover pool cages, for example. That leads to more claims closed without payment," Peltier said.

"In some cases, we encourage policyholders to file claims that we know will be denied. That's because hurricane deductibles are calculated on the calendar year. So, even if the loss did not reach your deductible after the first storm, you will be closer to reaching your deductible if you are hit again."

Peltier said that denials are also a required step for homeowners seeking assistance from the Federal Emergency Management Agency.

"The bottom line is that Citizens is committed to our policyholders and upholding our responsibilities to pay claims on covered losses," he said. "The Office of Insurance Regulation is looking over our shoulder, as it should, to ensure we handle claims properly."