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Not Easy to Shrink Citizens

According to, Florida’s Insurance Commissioner, Kevin McCarty, has come up with a list of ways to reduce the size of Citizens Property Insurance Corporation, the state backed property insurer, to something more palatable to the Governor, Rick Scott (R) and other government leaders that fear the company may not be able to survive a disastrous hurricane season. The company has already been continuously raising rates and deductibles on its own in the hope of driving policyholders out onto the private market. Markets, where the carriers may not be able cover losses from a major storm. In some cases, Citizen’s has also been cutting coverage, something very dangerous because many policyholders may find themselves without coverage and thus, the funds necessary to rebuild their homes should disaster strike. Unfortunately, many proposals are politically unpopular…

Very Unpopular Choices

Among the most controversial measures is to have Citizens go back to its original role as Florida’s main coastal high-risk insurer, thus effectively reducing its current portfolio of over 1.4 million policies to less that 500,000. Of course, this would force many homeowners back to the private insurers and higher premiums.

Another “idea” consists of greatly relaxing or completely eliminating the 10 percent cap on annual premium increases for the policyholders insured with Citizens and/or separating Citizens’ coastal and inland business. Thus, insured’s could see their premium’s go up significantly.

Legislators Come Up With Their Own Ideas

On the other hand, two of the state’s most influential legislators in insurance related matters, the Chairman of the Banking and Insurance Committee, Senator David Simmons, R-Altamonte Springs and the House’s counterpart, Representative Bryan Nelson have been setting tough goals for Citizens throughout the next two years. Nelson has said he may agree with McCarthy on increasing the cap to Citizens’ annual premium increases to 13 percent form the 10 percent it has been for a few years. However, even McCarthy, who proposed the higher cap to help reduce the number of policyholders under Citizens by forcing many into a cheaper (at least initially) private market, has said that a much higher cap could end up hurting the economy.

Company executives, including CEO Barry Gilway, believe that reducing Citizens’ in half, to less than 675,000 policies is an attainable goal. While some of those policies would cover Citizens’ traditional high-risk coastal market, most would cover inland policies which represent most of the 7,000 policies that Citizens signs up each week.

A Word of Caution

Experts from the Office of the Florida Insurance Commissioner have warned the legislators not to continue cutting back the coverage provided by Citizens because should disaster strike, many homeowners may find themselves unable to rebuild, something that would have catastrophic consequences on our communities. Similarly, other legislators like Senator Tom Lee, R-Brandon, have said that those seeking to reduce Citizens’ size should remember that forcing policyholders out of the company by raising rates and deductibles (as well as cutting coverage), should remember that many of these customers being forced out live in areas where there are no other insurance providers. Consequently, these people have no choice but to go to Citizens.

We 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 100 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.

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