Insurance regulators from the State of Florida have announced the approval of a 10.8 percent rate increase for policies underwritten by Citizens Property Insurance Corp., which will help the company increase its campaign to force hundreds of thousands of homeowners to look for home insurance within the private market. Simultaneously, some private insurance companies have started sending proposals to underwrite about 210,000 homeowners currently with Citizens.
Why Reduce The Size Of Citizens?
The Governors’ Office has been pushing for Citizens to reduce the size of its portfolio because they fear that despite the healthy financial surplus that the company has been able to build ($6.2 billion) over the last few years of benevolent weather (no significant number of hurricane related claims since Wilma in 2005) it may not be able to respond to a catastrophic hurricane season, leaving the tax payers to pick up the bill…
However, as worthy as the reason may seem, it is the method that insurance authorities are using that is bringing most criticism. For example, the company has come up with the idea of giving out up $350 million in loans from the above mentioned surplus to private insurance companies willing to take policies from Citizens and keep them underwritten for at least 10 years. However, as pointed out by State Representative Frank Artiles, R-Miami in a recent letter, some of the private insurance companies willing to underwrite policies from Citizens have “troubled financial records” themselves, which could leave the tax payers to foot the bill in case of a catastrophic hurricane season as much as if the policies were kept within Citizens, not to mention the loss of the money lent to them under the surplus loan program.
No Guarantee of Low Rates
It is worth mentioning that despite Citizens’ concerted effort to push policyholder out of its mist with continued increased rates as the ones just approved, there is not guarantee that policyholders moving to the private market will see lower rates elsewhere. In fact, Citizens is the only company mandated by law not to raise rates more than 10 percent annually. Therefore, despite the initial low rate offer of those “interested” private insurance companies, nothing stops them from hiking their rates to as much as the want the next year upon renewal. So far, the companies participating in the take out program are: Florida Peninsula Insurance Company, Homeowners Choice P&C Insurance Company, Southern Fidelity P&C, Southern Oak Insurance Company and American Integrity Insurance Company of Florida.
Homeowners receiving these letters will be automatically shifted to one of these companies if they do not opt out by November 6, 2012. It would be in these homeowners best interest to check the financial records of the company they are being sent to so as to make sure they are not being sent to one that is in financial distress or has a history of unusual increases of rates every year.
The Lawyers of Greenberg Stone and Urbano Can Help
You should always have an attorney help you review your policy and advise you on what coverage you should have and for how much. If you are about to renew your policy (with the same insurer or a new one), we can help you review it and make sure you are adequately covered and in a position to avoid costly expenses should disaster strike.
Moreover, please note that if your home has already sustained damages, our team of loss consultants, paralegals, and attorneys will assist you in every aspect of your claim. Our loss consultant will even go to your home to evaluate the damage you sustained at no cost or obligation to you. Contact us today for a free inspection by our loss consultant.
With more than 75 years of combined experience, the Miami Dade County Homeowners Insurance Claims Law Offices of Greenberg Stone and Urbano have helped thousands of Homeowners all over Florida review their policies, present their claims and get the compensation owed them by their insurance carrier. Visit our website to learn more about our firm and contact us today for a free consultation.