Citizens Insurance and the Decision the State is Making for You to Go With the “New” Takeout Insurance Companies – A Public Adjuster’s Perspective
Almost daily we are reading in the print media about the push to depopulate Citizens Insurance Company, the State chartered (and for all practical purposes state run) insurance company. This insurance scheme was started to cover Florida homeowners when the big boys of the property insurance world cut and ran following some hurricane hits in the Sunshine State. Who would have thought that would happen given all the advertisements that were run in the 1970’s and 1980’s encouraging us to insure with whoever had the most money to spend on an advertising campaign.
But as times change, we must move on. Now Citizens and the political types want you to move on and get out of Citizens. It seems their main argument is if a “big one” hits, it may bring Florida to its knees, as if not enough money is available to pay claims, every man, woman, and child will have a lifetime tax on them to pay for the aftermath. Yes, Citizens has the ability to collect the shortfall from all insurance policies sold in this State with the exception of medical insurance for as long as it takes to be made whole.
But what is not being discussed is that these new insurance companies (provided they are ADMITTED insurance carriers) can do the same thing in the event they become insolvent via Florida’s Insurance Guarantee Fund, also known as FIGA. FIGA will come after every man, woman, and child to get their money back for any deficit they have to cover for the newbie insurance companies. This same cost will be tacked on to the same policies Citizens has access to.
So what should you do when you get the letter that says your current Citizens policy is going to be placed with a company you have never heard of, one which you have never had an opportunity to do due diligence on, and one that has no track record established in a major storm environment?
Maybe not surprising given my firm’s background and experience in catastrophic claim events, we are fielding calls from friends , old clients and others concerned about these new companies they are being pushed into. One call that stands out is from a gentleman who is college educated, a principal in a South Florida CPA firm, and who daily gives financial advice to the firm’s clients. He asked me what I would do. My answer was that I would stay with Citizens. Interestingly, he wrote me back and said that’s exactly what his insurance agent said to do and what the agent was going to do. This agent by the way, sells insurance for one of the nations largest and most recognized insurance company. His employer unfortunately was one of the big boys who cut and ran on the property side of the business.
So there you have an insider’s perspective on what to do if you’ve received a takeout letter. Stay with Citizens for the time being.
If you have questions regarding any property insurance claim related issues please call 800.321.4488 or contact us to submit a question to one of our public adjuster or insurance claim experts