JACKSONVILLE, Fla. – Property Insurance experts are calling it a step in the right direction, in helping consumers in the state of Florida who have been rocked by the home insurance crisis.
Steps are now being taken for five insurance companies to take over nearly 200,000 policies from Citizens Property Insurance, in an effort to depopulate what is supposed to be Florida’s “insurer of last resort.”
Florida’s Insurance Commissioner recently signed orders approving proposals from five companies to assume thousands of Citizens’ policies as early as October. The good news is that this is an indication that private insurance companies want morebusiness in Florida, but there could be some bad news though for some Citizens policyholders, who will be asked to switch.
Citizens Property Insurance, Florida’s state-backed insurance company, has been growing at a historic pace over the past two years and now holds 1.35 million policies. The company is adding on average 7,500 policies every week, and for the first time in years now has the potential to downsize.
The Office of Insurance Regulation has approved 184,000 policies for takeout to the private market.
Insurance Information Institute spokesman Mark Friedlander said this means private insurers have been given the green light to take thousands of Citizens policies.
The five companies in the mix include Slide Insurance Company, Safepoint Insurance Co., Southern Oak Insurance Co., Florida Peninsula Co. and Monarch National Insurance Company.
(Mark Friedlander/Insurance Information Institute) 2:35
“You only need to accept it, if it is within 20% of what you’re paying for your Citizens coverage. So say for example, you’re paying now $3,000 For your Citizens policy premium, you get a takeout offer from a private company for $3,500. You must accept that offer even though it’s higher than what you’re paying for Citizens,” Friedlander said.
While Friedlander said some Citizens customers might see yet another rate increase with their new insurance provider, it’s notable that Citizens’ policies are typically cheaper than policies offered by private companies. The five companies will be able to selectively choose which homeowner policies they want to take over, taking into account the age of the roof on the house, the proximity to the coastline and other assumed risks.
Industry experts said one devastating hurricane could derail the progress Florida is making.
“Certainly, the wildcard in any type of program that is helping to stabilize the Florida property insurance market is hurricane activity. And not only the volume, but the impacts in terms of property damage, and a devastating hurricane would certainly be a setback for the entire Florida property insurance market, as well as any depopulation plans of Citizens, no doubt,” he said.
If you’re a Citizens customer and the company takeover offer is more than 20% of your current premium, homeowners can decline the coverage and stick with Citizens.
Friedlander said all of the companies that could take over Citizens’ policies are in good financial standing and not on the state’s watchlist.