Citizen’s Property Insurance Corporation is supposed to be the insurer of last resort, but the firm has become the state’s largest property insurer with more than 1 million policies.
However, there is a concerted effort to move property owners back to the private market.
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Property owners used to go to Citizen’s only as a “last resort” when they could not find insurance anywhere else, but more and more people have turned to them because they are the least expensive option.
In December, the Florida legislature passed a bill to try and change that, and many are already feeling the pinch.
‘Steered Me Away’
When John Casaburro opened his latest insurance renewal, he was like many Floridians: smacked with sticker shock.
“I was shocked when I opened the bill,” Casaburro said. “It took me a day to get over it.”
His policy went from $1,044 annually in 2021 to $3,287 for renewal in 2023, and it’s even more expensive if “full payment isn’t made,” according to the renewal notice.
“It’s a rich man’s deal here. If you can afford the full payment, you’re paying less money,” Casaburro said.
When he realized rates were rising, he decided to call Citizen’s for a potentially less expensive rate.
“And Citizen’s steered me away,“ Casaburro said. “Sent me to three popular insurance companies, State Farm, Farm Bureau, All State.”
Even some of Citizen’s current policy holders told News 6 they are feeling the pressure.
“Citizen’s is pushing back on me to use private coverage,” a viewer wrote to News 6 in an email.
“They’re providing costs for other private coverages and making me have to agree or disagree each time,” he said.
News 6 asked Michael Peltier, the spokesperson for Citizen’s, why it’s happening.
“It gives Citizen’s a tool to make sure that we are acting as the insurer of last resort,” Peltier said.
Citizen’s has reached nearly 1.2 million policies.
Since Citizen’s is backed by the state, which means taxpayer-backed, their sweet spot is about 400,000 policies, according to Peltier.
As such, there is a concerted effort to move property owners to the private market.
More and more policy holders will be experiencing this, according to Peltier.
Depopulation
There are two ways it will happen.
In December, Florida’s legislature passed a bill that, in part, states that if a homeowner can find a policy within 20% of the price of their Citizen’s policy, they have to take it.
“If we find that there is a company within 20% of what a Citizen’s premium would be, the customer would be ineligible for Citizen’s,” Peltier said.
The next mechanism is called depopulation.
Private insurers can apply to the Office of Insurance regulation to look at Citizen’s books to see whether there are policies they would like to take out of Citizen’s portfolio.
That’s why the viewer who emailed News 6 was given the option.
“If policy holders choose not to respond, those policies will be transferred to the private company automatically,” Peltier said.
Casaburro said he feels like you have to be a millionaire to afford property insurance in Florida.
“We’re not all millionaires...” Casaburro said. “Right now, yeah, my neighbor said the same thing. His skyrocketed too.”
If you are a Citizen’s policy holder, pay attention to your email and your account.
If you get the notification that a private insurer will take your policy, research exactly what they’re offering and make sure it is equivalent to or better than the policy you have with Citizen’s before you accept or deny it.
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