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New law won't let homeowners back into state-run Citizens, but offers other protections


Homeowners will get more information in the future when deciding if they should voluntarily leave that state-run Citizens Property Insurance Committee for a private company.

Under a bill Gov. Rick Scott signed into law on Thursday, homeowners will get new details on all potential offers to switch to a private carriers and Citizens itself will be responsible for mailing them, instead of leaving it to private companies customers have often mistaken as junk mail.

In the past, homeowners have complained that offers have come from private companies unfamiliar to them, which many mistook for junk mail and threw away. In addition, if there were multiple offers from private companies, Citizens only allowed one company of their choosing to present an offer. Now, Citizens will have to list all offers giving customers some customers more options.

But while the new law offers new consumer protections, it omits the one State Sen. Anitere Flores, R-Miami, fought hardest to pass. Flores initially proposed a provision to allow homeowners 36 months to return to Citizens after they left if the new company they had raised rates dramatically. Flores has said some homeowners have reported getting hit with 200 percent premium increases just a year or two after being kicked out of Citizens. She said those people should be allowed to return to Citizens if they want.

But that provision was nixed in the closing days of the spring Legislative session because legislators worried Scott would veto the legislation. In 2015, Scott vetoed a similar bill that would have allowed homeowners to return to Citizens. Scott said then he worried it would stem the progress Florida has made in trying to reduce the number of policies in Citizens.

Since 2012, the state has been aggressively reducing the number of people in Citizens. After a flurry of hurricanes and tropical storms in the mid 2000s, Citizens exploded in size as major insurers cut back in Florida. Citizens, which was created to be the state's insurer of last resort, became the state's largest insurance company with 1.5 million policies.

That put political pressure on lawmakers to lure private companies back into the market and shrink Citizens. The more policies Citizens carries, the greater the potential financial hit on everyone in the state who has insurance. Under state law, Citizens can bill even non-Citizens policyholders if it runs out of cash to pay damage claims after a major storm.

Citizens has trimmed down to fewer than 500,000 policies as of March, but its tactics have been widely criticized and helped provoke Flores' legislation the last two years. Many customers said they were switched to private carriers without their knowledge because the official notice letters looked like junk mail and were from new carriers people did not recognize. To avoid being switched, Citizens puts the onus on customers to fill out an "opt-out" form, which many consumers said was hard to find.