Private insurers considering 150,000 Citizens policies
By Paul Owers South Florida Sun-Sentinel3:48 p.m. EDT, September 6, 2012
Four private insurers have been approved to take over 150,000 policies from state-run Citizens Property Insurance Corp., regulators said Thursday.
Citizens customers will be notified Oct. 1 if their policies have been selected. Policyholders have 30 days to accept or decline the offers. If customers don’t respond, their policies will be assumed by the private companies on Nov. 6.
The four companies are:
Homeowners Choice Property & Casualty Insurance Co. 75,000 policies
Florida Peninsula Insurance Co. 35,000
Southern Fidelity Property & Casualty 30,000
Southern Oak Insurance Co. 10,000
Policyholders who accept the offers may be charged higher rates by the new companies. But if they stay with Citizens, the insurer of last resort, they face the possibility of steep assessments.
Citizens has been trying to push many of its 1.4 million policyholders to the private market, saying it’s concerned it may not have enough money to pay claims after a major hurricane.
Everyone in the state may be charged up to 6 percent of their annual premiums if Citizens can’t pay storm claims. But Citizens policyholders would pay first and could pay the most – up to 45 percent of their premiums.
So far in 2012, private companies have taken over 84,339 Citizens policies, according to the Florida Office of Insurance Regulation.
Citizens to revamp reinspection program
Diana Latzko, a Citizens policyholder in Davie, outside her home. Latzko, an avid record keeper, kept all of her records, permits and even the stickers on her windows to prove full compliance to hurricane codes to the Citizens inspector. (Ginny Dixon, correspondent for Sun Sentinel / August 19, 2012)
By Kathleen Haughney, Tallahassee Bureau
5:42 p.m. EDT, August 17, 2012
TALLAHASSEE — The state’s largest property insurer announced Friday that it plans to completely revamp its home reinspection program after an outcry from consumers and intense media scrutiny over a $137 million rise in premiums tied to the reinspections.
Under the plan announced by Citizens Property Insurance President Barry Gilway and Chairman Carlos Lacasa, homeowners who lost insurance discounts because of a reinspection can have a second one, paid for by Citizens, and also will have new avenues to dispute the results, including a toll-free phone number.
“They’ll have an opportunity to have a second look before that credit is removed from their policy,” Gilway said.
Originally created as an insurer of last resort for Floridians who lived in areas where insurers did not write policies, state-run Citizens covers 1.4 million properties, mostly in the South Florida and Tampa Bay regions that are most at risk for hurricane damage. Gov. Rick Scott has asked the board to shrink the program, but consumer advocates have worried that request may result in high premiums that make home ownership impossible for some.
The reinspection program, begun in 2010, was supposed to reward homeowners with discounts for “hardening” their homes against storm damage by upgrading roofs, doors and windows. But it has faced criticism because many customers lost previous discounts as a result of a reinspection and saw their premiums rise substantially.
The average reinspection had resulted in a $598 increase on residential properties, according to a report by Citizens in July.
Lacasa, a former state lawmaker, said one of the problems in the program has been that standards for receiving what are called “mitigation credits” have become tougher in recent years. Since the reinspection evaluated a home using the current, more stringent standards, people lost credits they’d had for years, causing the price to go up.
He added that all insurance companies used those standards, not just Citizens.
The reinspection would let people make some changes to areas where they may have lost credits, or simply challenge the original inspection report, the two executives said. The insurer has not decided whether the program will apply retroactively.
Gilway, who was named president of the state-backed insurer in June, said he and his staff had spoken to a number of legislators, Chief Financial Officer Jeff Atwater’s office and state insurance advocate Robin Westcott about the potential changes. He said he plans to meet further with Westcott, who had been openly critical of the inspection program.
Sean Shaw, who was insurance consumer advocate under former Chief Financial Officer Alex Sink, said that approach was a good sign for consumers.
“Citizens has a long way to go to mitigate public opinion, but free second inspections and enhanced dispute resolutions seem like a step in the right direction,” said Shaw, now a lobbyist. “Without more concrete details, policyholders need to take a trust-but-verify approach. Our economic recovery depends on a healthy, stable housing market — which is why we need Citizens to finally walk the walk.”
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