ORLANDO, Fla. – In a crucial decision that will impact thousands of customers, Citizens Property Insurance has given its policyholders until next week to decide whether to accept an offer from a private insurer. The state’s property insurer of last resort sent out letters to 304,000 policyholders in September, informing them of the opportunity to switch to a private insurer. However, if these customers fail to respond by Tuesday, October 10, their policies will automatically default to the private insurance company, potentially resulting in increased costs.
This move is part of a broader strategy by Citizens to reduce its customer load and mitigate risk. With approximately 1.4 million customers, Citizens has become one of the largest property insurance companies in Florida, a situation that was not the original intent when the state government created the company. This expansion has occurred as many private insurers ceased writing policies in Florida, making Citizens the only option for many residents.
According to insurance experts, the current growth in Citizens’ policies is unsustainable. Mark Friedlander from the Insurance Information Institute highlighted the potential risks associated with this situation, stating, “What it does is create a risk exposure in Florida where Citizens, because they are so rate restricted compared to private companies, they are not bringing in enough rate for the risk they are writing. That means the rates are what we call not actuarily sound rates, and it puts all of Florida consumers in a position to potentially pay what would be labeled a hurricane tax.”
Recently, Florida insurance regulators approved six private insurers to assume an additional 150,000 policies from Citizens and extend offers to those policyholders. This development further reinforces the state’s efforts to reduce Citizens’ burden and promote a more balanced insurance market.
Policyholders who have received takeout letters have the option to make their decision online or by contacting their listed agent. In an effort to ensure maximum response rates, Citizens is actively reaching out to agents and policyholders who have received offers but have yet to respond.
In conclusion, the deadline for Citizens Property Insurance customers to make a decision regarding the offer from a private insurer is fast approaching. This decision holds significant implications for policyholders and the overall insurance landscape in Florida. As the state continues its efforts to address the unsustainable growth of Citizens, it remains crucial for policyholders to carefully consider their options and make an informed choice.