Another 127,000 homeowners in Florida can expect to get notices trying to nudge them out of the state-run property insurance company in the coming months as part of an on going effort to “depopulate” Citizens Property Insurance Corporation.
The Florida Office of Insurance Regulations announced on Thursday that they have given the approvals to five companies to offer homeowners private insurance that would remove them from Citizens. Homeowners would be switched if they don’t fill out paperwork to opt-out of the offer and remain in Citizens.
Citizens is already at a near-record low after shedding about 1 million policies in four years. But how the state has pushed homeowners out of Citizens has come with significant backlash, that state officials say they are fixing.
In the past, homeowners were subject to getting letters warning of dramatic assessments if they remained in Citizens, even if that was not completely accurate. Others say the take-out offers were in letters that looked like junk mail, giving homeowners no real opportunity to opt out of switching. And other say after they were switched to new carriers, they got blasted with big premium increases when their policy got renewed – increases that had not been disclosed at the time of their switching over.
Citizens instituted new reforms in October that have included more clearly identifiable letters, easier access to opt-out forms online, and less intimidating wording to homeowners about the results of staying in Citizens.
Created in 2002 in a merger of the state's wind pool and former state-run property insurer known as the JUA, Citizens exploded in size as major insurers such as State Farm cut back covering what's viewed as the country's most hurricane-susceptible state. Citizens was saddled with 1.5 million policies as recently as 2012, making it the state's largest insurer. By the end of 2016, Citizens projects it will be down to 450,000 policies or fewer.
Citizens is under political pressure to shrink because the more policies it carries, the greater the potential financial hit on everyone who has insurance. Under state law, Citizens can bill even non-Citizen policy holders if it runs out of cash to pay damage claims after a major storm.
The five companies approved for the latest round of take outs are: Anchor Property & Casualty Insurance Company, Heritage Property & Casualty Insurance Company, Safepoint Insurance Company, Southern Oak Insurance Company, and Weston Insurance Company.