Just Ask Tim - Blog
Anyone who remembers Hurricane Andrew will never forget the level of destruction that storm caused. It also changed the Florida insurance marketplace forever. Because Floridians found it difficult to secure home insurance post Andrew, the State of Florida created the Florida Windstorm Underwriting Association and the Florida Residential Property and Casualty Joint Underwriting Association. The entities were created to provide home insurance to Floridians- who could not obtain home insurance in the private market. It took almost a decade before private insurance companies started to increase capacity. As the market began to improve, in 2002 the State of Florida merged these two state entities into Citizens Property Insurance Corporation of Florida.
Citizens had a simple purpose; 1) to provide qualifying Floridians home insurance coverage that could not find home insurance in the private market and 2) assure there is a path for these insureds to get back to the private market at some point in the future. Almost 20 years later, these are still the objectives of Citizens. There are many who believe Citizens is the insurance company of last resort. To some extent that is true, but Citizens will not take all homes. Like the private market they have restriction. Additionally, Citizens does not provide the same level of coverage available in the private market and your ability to customize coverage is also limited. Lastly, Citizens introduced the clearing house a few years ago and instituted a further restriction based on price. The rule is simple, if you can qualify for private market insurance you cannot be written by Citizens unless that private market policy premium is 15% or more higher than the Citizens premium.
Why are we choosing to write about this now? Because in the past year South Florida (Palm Beach, Broward, and Miami-Dade counties) have seen a significant increase in the number of private market insurance companies that will not accept new business. Many of those that are still writing new business have restrictions on the age of the home, the value of the home, and the condition of the home. Additionally, for the third year in a row the private market has continued to increase premiums in some cases more than 20%.
This has increased the number of Floridians receiving home insurance quotes from Citizens. It is our thought that Floridians need to be aware of the purpose Citizens serves, that the coverages are not the same, there are limits to coverage customization, and unfortunately the customer service and claims experience are not that great to say the least. We would advise Floridians to consider that even if a private market policy is 15% higher than Citizens you should consider staying in the private market if you can.
To learn more or ask questions give us a call at (954) 678-2658 or email us at firstname.lastname@example.org