ORLANDO, Fla. — Thousands of Citizens Insurance policies could soon be taken up by private insurers.
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The insurance commissioner signed orders this week approving five private insurers to take as many as 184,000 policies from Citizens.
The insurers include:
- Slide, assume as many as 100,000 Citizens policies
- Safepoint, 30,000 policies;
- Southern Oak, 25,000 policies;
- Florida Peninsula, 19,000 policies;
- Monarch, 10,000 policies.
This is part of the state’s efforts to depopulate policies. Citizens has nearly tripled in policy count since the middle of 2020. State leaders pushed for this because of the financial risk Citizens could have if Florida is hit by a major storm.
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The private insurers could start taking up policies as soon as October 17.
However, though these five insurers were approved to pick up as many as 184,000 policies, it doesn’t mean that’s how many policies Citizens will pass off to these insurers.
Policyholders can turn down an offer from one of the insurers. Also, the private insurers can choose which policies they want.
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“We sort of stand back and let them go through with their criteria and pick the policies that they want,” said Michael Peltier with Citizens Insurance.
Peltier says the five private insurers can essentially “cherry pick” which policies they want to pick up from Citizens Insurance based on the private insurers criteria.
The criteria can include the age of the home, the age of the roof, value of the property, or even what part of the state the home is in.
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“It just really depends on what the company is looking for,” Peltier said.
Citizens Insurance says each of the private insurers were reviewed and vetted by the Office of Insurance Regulation, making sure the companies were financially sound to take on these new policies.
So what should you know if you’re one of the policyholders that receives an offer letter from one of the five private insurers?
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Insurance expert Tom Cotton of Hugh Cotton Insurance Company said it’s possible you could be paying more, but there are protections for consumers.
“If the quote they’re offered is more than 20 percent more than what Citizens has, they don’t have to accept it,” Cotton said.
Cotton said even though your rates may be higher with private insurers, it’s best for Citizens policyholders to accept the offer from a private insurer because it eliminates the possible risk of staying with the state-backed insurer of last resort.
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“Citizens is an assessable entity, if there’s a lack of sufficient funds to pay claims, their policyholders are going to be asked to make a contribution,” Cotton said.
Cotton added that this news is a good sign for the Florida Insurance Market.
He said it’s evidence that the insurance reform from the last legislative session is beginning to take effect. Cotton said it’s going to take more time to see the full effect.
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