“When the market is healthy, citizens become smaller as private companies take advantage of good market conditions,” the Citizen Spokesperson said.
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
With so many policyholders, Citizens is exposed to the risk of
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
“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
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
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
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.
“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.”