The insurance company you love to hate
I have a secret, I hate insurance. I hate thinking about it, I hate talking about it, I hate paying for it, and I especially hate writing about it – something that I have been doing way too much of recently. But, never-the-less here I am again with another column about Citizens Insurance.
On Monday, Sept. 9, the state’s insurance regulators allowed Citizens Property Insurance Corp. to charge an estimated average increased rate of 6.3 percent. This figure is down 1.6 percent from the original request Citizens made. What this means to the regular homeowner according to the Florida Office of Insurance Regulation is an average increase of 7.9 percent statewide.
South Florida and counties along the coastline could see a 10 percent jump in their insurance bills, with lower increases for residents who live further away from the coast. This is the fourth straight year that Citizens has increased its rates.
Barry Gilway, Citizens’ CEO, was pleased with the rate approval indicating that this action will allow Citizens to continue providing quality service to their 1.2 million policyholders, while still reducing the risk of an assessment on all Floridians. The possibility of a statewide assessment has always been lurking in the background since Citizens has always maintained that the state’s exposure to hurricanes makes every property owner in the state vulnerable to storms, even if they are not directly on the coast.
Gilway’s statement is especially interesting, since the same day the Citizens’ rate increase was announced, it was the peak of the quietest hurricane season in recent years. There has not been a major storm formed since the hurricane season officially started. As of this writing Tropical Storm Humberto was forming off the coast of Africa and is expected to curve out to sea staying away from Florida. If Humberto does turn into a hurricane it would be one of the latest first hurricanes on record in more than 100 years.
However, there are still more than two months left in the hurricane season and it’s not unusual for storms to form quickly in September and October. But the probability of a major storm forming starts to drop off after the peak of the season, and hurricanes are rare after late October.
Citizens also recently announced a policy comparison clearinghouse in which consumers can shop for comparable offers of coverage from participating private market carriers. This is part of the continuing effort to decrease Citizens’ policyholders and move them into the private market place.
Many Citizens’ policyholders will be getting letters in the next month from takeout companies indicating their insurance is being taken over by them. Homeowners can opt to stay with Citizens, but ultimately they may be forced to find new insurers through the state’s clearinghouse where private insurance agents will handpick Citizens’ policies.
If it sounds confusing it is, but it’s very important to pay close attention to any correspondence you receive about your homeowner’s policies, since there are time sensitive decisions that you may have to make. The Citizens’ rate increase will become effective in January and February of next year, which as we have previously discussed, is right on the heels of potentially heavy increases in flood insurance rates.
My biggest fear when I read about the insurance increases for coastal communities is the impact it will have on just the average homeowner and retirees who may have lived on the coast for decades. The wealthy can usually absorb what is thrown at them, but do we really want Florida’s coastal communities to be an enclave for only the rich?
I hope that I don’t have to think about the one thing I really hate for a while, but I fear that may be impossible.