Citizens exceed 1M policies; prices will soon increase

florida The insurer of last resort surpassed one million policies for the first time since 2013. And, with the state of the private insurance market still in disarray, there is no sign that this growth trend is slowing.

Citizens Property Insurance Corp. reached the milestone earlier this month, and as of August 12, it amounts to 1,005,000 fonts. The state-backed government entity was established two decades ago by the Florida Legislature to provide coverage for homeowners who cannot find insurance in the private market.

“When the market is healthy, citizens become smaller as private companies take advantage of good market conditions,” the Citizen Spokesperson said. Michael Peltier. “When the market is going through a tough time, we grow.”

In Palm Beach County, the third most populous county in the state, there are more than 105,000 non-commercial Citizens policies. Thursday is an increase of almost 60% compared to July 31 last year, according to a spokesperson for the Citizens.

Industry experts continue to blame litigation and fraudulent rooftop claims for the current crisis. So far this year, five insurers have gone insolvent, pushing customers into a depleted market or sending them to citizens.

In good weather, without an impending natural disaster, Citizens customers and the market as a whole “shouldn’t really notice” how many policies it has, Peltier said.

“We’re designed to be able to handle fonts whether we have 500,000 fonts or a million and a half,” he said.

But that view changes after a storm. If a hurricane or two hits Florida and causes property damage to the vast majority of citizen policyholders, which could prevent the insurance provider from paying claims and leave the rest of Florida residents to foot the bill, even though they have no policy with citizens.

With so many policyholders, Citizens is exposed to the risk of $346 billionbut the ability to pay $13.4 billion in the claims, said Marc Friedlandersupported industry spokesperson Insurance Information Institute. While there are safety nets in place to help pay homeowners’ claims, Citizens can levy assessments on its customers, or even car and rental insurance policies in its overall portfolio.

This happened after the state was hit by eight hurricanes during the 2004 and 2005 seasons.

Known as the “hurricane tax”, a 1% levy was imposed on home and auto insurance policyholders in 2007 to bail out the coffers of the Florida Hurricane Disaster Fund. This assessment was then increased to 1.3% four years later. The evaluation was completed in 2014, more than a year ahead of schedule, having identified between $350 million and $500 million every year.

“It’s a situation we would like to avoid,” Peltier said.

This period, between 2007 and 2013, was the last time citizens supported more than 1 million policies, with the peak reaching 1.5 million in 2012.

But this time it’s not nature that’s causing problems in the market.

“What we are facing now is a man-made crisis,” Friedlander said. “That’s what makes Florida crisis so unique.”

Peltier noted that the measures passed in this summer’s special legislative session “will take time to bear fruit.”

At the rate Citizens is growing, however, the insurance provider could hit 1.2 million policies by the end of the year and could hit a record number of policies by this time next year, Friedlander added. .

Citizen fares also increase from October 1st

Insurance regulators approved rate hikes for Citizens policies earlier this summer. Citizens have called for general increases to come closer to the maximum allowed at 11%, but the most common type of insurance, known as comprehensive homeowners insurance, will increase by 6.4%.

Home insurance rates will increase after October 1stand trade policies will increase November, 1st. Increases will take effect after renewal.

For any homeowner worried that their insurance company might be next in line, don’t panic, Friedlander said. Instead, he noted, be sure to keep your coverage on and make sure you’re fully covered.

It’s probably not the best time to seek out a new insurance provider if you don’t need one, Friedlander said.

“It’s very difficult to move your cover right now. It’s possible, but it’s very difficult,” he said. At the very least, have a conversation with your agent, he added.

While doing this, make sure your coverage is adequate to pay for increased costs due to inflation, he said.

Florida remains the most volatile home insurance market in the country,” he said.

“Until the market stabilizes and private insurers say this is a market they want to write risk in, we are going to continue to see the majority of new policies written by citizens.”

Hanna Morse covers consumer issues for Palm Beach Post. Drop a line at [email protected]call 561-820-4833 or follow her on Twitter @mannahhorse.

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