Update: 2016 Citizens Homeowner’s Insurance Policies Being Removed

Citizens Property Insurance Corporation – Florida’s State Founded Insurance Company

update on citizens insurance december 2015

This is not the first time I’ve discussed Citizens Property Insurance Corporation’s efforts to continue seeking state approval to remove homeowner’s policies from their book of business.  As stated in past articles, Citizens Insurance was originally formed by the state of Florida to offer home insurance policies to those residents who could not secure a homeowner’s policy through any other private insurer.  Let’s recap why this happened…

The History of Citizens Insurance

The catastrophic damage that Hurricane Andrew caused in 1992 was a big part of why it was necessary to form Citizens.  With losses totaling nearly 30 Billion, private insurance carriers found themselves with depleted reserves after claims were paid to Florida homeowners.  As a result, there were many private insurance carriers that went bankrupt.

So in 2002, with nearly 1 million coastal homeowners unable to secure coverage Florida State Legislators approved the formation of Citizens Property Insurance Corporation.   This merged the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and the Florida Windstorm Underwriting Association (FWUA).

Soon after, with Citizens being the newest home insurance option for Florida residents, they quickly started writing policies and this momentum did not end for sometime.  So Florida’s plan for Citizens to be the last-resort option for homeowners insurance backfired in a big way and they soon became the primary, if not the only, choice for many Florida residents needing to secure affordable home insurance.  This was due solely to the ailing private home insurance market that had plagued Florida.

With many so many Floridians being insured through Citizens after the devastating hurricanes of 2004, they were on the hook for a lot of claims.  Damages that year totaled nearly 60 Billion.  In an effort to stop the bleeding they quickly raised home insurance premiums to the maximum allowed under state law in an effort to avoid writing new policies.  This strategy stayed in effect through 2006, but as time has passed we’ve not had a major hurricane hit Florida in 10 years.  There have been continuous efforts by state legislators to reposition Citizen’s as the insurer of last resort, but there have been challenges throughout the last decade.

Citizens Insurance Today…

Beginning in 2013, state legislators began a new campaign to spark competition in the home insurance market and reduce Citizens overall exposure.  This new effort was going to be accomplished by offering monetary payments to private insurance companies willing to takeover home insurance policies from Citizens.  This has been a highly debated political topic, but it did attract more new insurance companies to form as a result.  The Florida Office of Insurance Regulation (FLOIR) is the approving body for these Citizen takeouts as well as the regulating body that reviews new insurance companies wishing to enter the home insurance market in Florida.

The FLOIR has been approving the transfer of the vast majority of their home insurance policies to the private insurance market.  Today in Florida there are more private insurance companies writing homeowners policies than in quite some time, which has prompted Citizens to continue seeking approval to remove more and more policies.  To date in 2015 the FLOIR approved over 1 million policies to be transferred.

2016 Citizens Takeout Update

The latest round of approvals granted by the FLOIR allows Citizens Insurance to transfer approximately 75,000 additional policies.  This includes roughly 72,000 personal home insurance policies and a little over 2,500 commercial policies.  This recent approval is set to go into effect in February and brings the total number of policies approved for 2016 removal just over 200,000.  Below is a breakdown showing which private Florida insurance carriers are receiving these transferred policies and the number of approximate policies they’ll take.

Receiving Florida Insurance Companies

National Specialty Insurance Company – Securing over 17,000 personal home insurance policies.

Heritage Property & Casualty Insurance Company – Taking approximately 55,000 home insurance policies and around 1,500 commercial policies.

Avatar Property & Casualty Insurance Company – Approved to take just over 1,000 commercial policies.

What To Do If You Have A Citizens Home Insurance Policy?

I’ve said before and I’ll say it again, there are a lot of good insurance companies writing homeowners policies in Florida today despite all of the craziness you may read online or see on the news.  So what to do…

  1. Don’t Worry!
  2. Take Time To Review Policy.
  3. Call A Local Insurance Professional.
  4. Understand All Your Insurance Options.

Final Thought

Education is probably the most important component to protecting your home and saving money in the long run.  By having a good understanding of your home insurance policy and the options that are available you’re able to make the best decision.  I operate two Brightway Insurance agencies and my team has access to more home insurance carriers than most of the competition.  With such a large pool of Florida insurance companies to choose from we are able to best fit your individual needs with an insurance policy to match.  We write Citizens Property Insurance at Brightway and have a thorough understanding of their recent policy takeouts.  As I stated above, the most important thing to do if you have a Citizens home insurance policy, besides not stressing, is to contact an insurance professional to review all your options.  To get a complimentary home insurance consultation from a local, trusted resource please click here or call us today!

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