Homeowners Insuranc

Should I Stay or Should I Go? Citizens Takeouts and You.

It started with something that looks like a dirty trick. As a writer for the Sun Sentinel reports, a new round of Citizens takeout notices went out last week to thousands of policyholders in Broward and Palm Beach counties. Here’s the thing, it’s from an insurance company that’s not your own, and if you throw it out instead of returning the opt-out form, your policy is switched to a new carrier. Topping it off, there’s a new clearinghouse system where your renewing policy is shifted to a carrier making an offer of the same premium or lower.

Ostensibly, Citizens is at the mercy of the legislature and state regulators who run the whole show. Depending on who you listen to, they are shifting policies back to the private marketplace so that they can continue to service those who cannot find adequate coverage, or they are shoving hundreds of thousands of policy holders onto untested companies with questionable business practices and more exposure than reserves. As noted in the Sun-Sentinel article, one of the Homeowners Insurance Companies “stress tested”, has $41.2 billion in exposure and $117 million in surplus – or $731 per policyholder versus Citizens’ $8,172.

Stress Tests Stress Consumers

In what was marketed as a bit of good news, a state report said that all 112 insurance companies and  67 “domestic” carriers passed a recent round of a statewide stress test, with only one carrier not having enough reinsurance (backup insurance) to pay claims in the event of a major event. The test was based on the financial impact of the unnamed 1947 Fort Lauderdale Hurricane, a 1921 unnamed hurricane in Tampa, and the 2004 hurricane train of 2004 that saw Charley, Frances, Ivan, and Jeanne vex Palm Beach County.

Insurance Commissioner Kevin McCarty said that the aggregate results mean that policyholders should have confidence, though as has been muttered, any horse can get over a jump if you have enough people willing to pick him up and shove him over. The testing process has been criticized for not being as transparent as it should be, and the resulting data hard to come by, though those interested can find some of it here and a copy of the full report PDF here.

Stay or Go?

Though we are insurance agents here at E & L Insurance, we are also homeowners. We understand the frustration and anger that people are experiencing. We can say that in some cases, going with a private insurer can save you money and give you comparable or better coverage when measured against your Citizens policy. It’s also understandable that you are wary of companies you have never heard up turning up in your mailbox. The thing is that you need to talk with a professional before you decide to stay or to go. You don’t have to go, you don’t have to stay, but you do need to be aware of the opt-out notices sneaking into your mailbox, and getting junked before you know they’re there. Bring it to our office, and we’ll work with you to get your best result.