How would the Florida Legislature have acted this past session if Citizens Property Insurance (Citizens) was not a fall back option for the private market?
The article below was from October 2021. This information was and is readily available for anyone and should have been considered in the decision making process this year.
In October, Citizens Property Insurance knew they were going to be in trouble due to the amount of policies they were taking on. It is mind numbing to think the people that are responsible for Governing Florida kicked this can down the road another year. The attempts to stem the growth are just eyewash.
Citizens should NOT be an option for most clients, however, it is going to be the option for most this coming year and here’s why!
Why Citizens will not shed policies:
– FMAP is not an option for most. They are in Citizens for a reason
– Inspections may help for some policies but most are good risks that are just priced out of the private market or the roof is over 15 years old
– The Depopulation program may work at other points in time but not likely in this market. The premium with the takeout company many times is significantly higher than Citizens.
Citizens will grow and grow significantly this year for the following reasons:
-The Legislature did not act!
– There is a very limited if any market for a home with a roof over 15 years old
-Carrier Insolvency i.e Avatar 42,000 policies
-Citizens rates are artificially low and inadequate for the risk they are taking on. (This very well could be the biggest driver of policies into Citizens this year)
Even without a hurricane this year Citizens is going to burn through surplus as they are not immune to roof claims and litigation.
So a big Thank You goes out to those in the Legislature that failed to act this year. Now instead of one Crisis to deal with next year you are going to have TWO. What to do with the Private Market and how are they going to Citizens being the largest insurance carrier in Florida burring surplus.