Florida

HURRICANE INSURANCE

Citizens’ cash eyed by private insurers

 

Citizens Property Insurance is considering paying private companies millions of dollars to take over its policies.

IF YOU GO:

What: Citizens Board meeting to decide rate filing for 2013.

When: 9 a.m-1 p.m.

Where: JW Marriott Hotel, 1109 Brickell Ave., Miami.


Herald/Times Tallahassee Bureau

Reducing the size of Citizens could lower the amount of potential assessments, or “hurricane taxes,” levied on consumers if Florida experienced a storm the size of Hurricane Andrew. Company leaders say Citizens needs to shrink from 1.4 million policies to about 750,000.

Preliminary results from a survey being conducted by Citizens show that less than 20 percent of homeowners realize that they could be hit for assessments after a major storm.

Fearing hurricane taxes, Scott told then-Citizens’ president Scott Wallace last year to shrink the size of the company drastically over the next few months.

“I expect the solution you and the board bring to me will solve the problem by June of next year before the next hurricane season,” Scott told Wallace in November.

Since then, company has launched on an aggressive campaign to get homeowners out of Citizens. It has scaled back what it covers, hiked premiums and deductibles, inspected thousands of homes and added more paperwork for potential new customers. It also has eliminated millions of dollars of fees for private companies taking policies out of Citizens this year.

But the impact on Citizens’ total size has been minimal. The company, which grew by more than 30 percent from 2008 to 2011, has only shrunk this year by 32,500 policies, or 2.2 percent. In part of South Florida and Tampa Bay—regions where most of Citizens’ risk is located—there are few, if any, private companies offering affordable insurance, consumer advocates say.

Additionally, about a third of homeowners decide not to leave Citizens when presented with a “takeout” offer from a private company. Many fear their rates will increase faster once they leave Citizens, which by law must keep annual rate hikes below 10 percent. Others are worried about the financial strength of the takeout company.

In the past, some smaller companies have failed after taking policies out of Citizens.

Toluse Olorunnipa can be reached at tolorunnipa@MiamiHerald.com and on Twitter @ToluseO

Read more Florida stories from the Miami Herald

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category