Florida – Thousands of Citizens Property Insurance customers have until next week to decide whether to accept an offer from a private insurer.
Florida’s property insurer of last resort sent letters to 304,000 policyholders in September informing them that they have an offer to switch to a private insurer. Those customers have until Tuesday 10 October to respond, or their policies will automatically be transferred to the private insurer, which may cost more money.
It’s all part of a push by Citizens to reduce its customer load and its risk. Citizens has about 1.4 million customers, making it one of the largest property insurers in Florida, which was not the original intent of the state-created company and comes as many private insurers have stopped writing policies in Florida.
Insurance experts say the growth of Citizens’ policies is unsustainable.
“They’re not supposed to be the only option,” Mark Friedlander of the Insurance Information Institute told News 6 last month. “What it does is it creates a risk in Florida where Citizens, because they’re so rate constrained compared to private companies, they’re not bringing in enough rate for the risk they’re writing. That means the rates are not what we call actuarily sound rates, and it puts all Florida consumers in a position of potentially paying what would be called a hurricane tax.”
Earlier this week, Florida insurance regulators signed off on six private insurers taking an additional 150,000 policies from Citizens and making offers to those customers.
Policyholders who receive takeout letters can make a choice online or by contacting their agent listed on the takeout offer letter. Citizens is contacting agents and Citizens policyholders who have received an offer but have not yet responded.
