TALLAHASSEE, Fla. — The number of homeowners insured by the state’s Citizens Property Insurance Corporation plummeted last week amid a long-running effort to move customers to the private market.
The public posted data online on Monday showing the number of insurance policies was 1,035,534 as of Friday, down from 1,271,907 a week earlier and 1,268,738 two weeks ago.
The decline coincided with nine private insurers receiving approval last week to underwrite up to 418,000 national policies as part of a so-called “population reduction” program. Private insurers have also received regulatory approval to write 549,307 additional policies through the program by the end of the year.
These are maximum numbers; the actual transfer of policy to private markets is smaller. But the depopulation program has become a key strategy as state leaders look to downsize the population of what has become Florida’s largest real estate insurer in recent years due to financial problems in the private market.
Read: Major Florida home insurance companies push for rate hikes
As an example of how this process works, Tampa-based HCI Group said its subsidiaries Homeowners Choice Property & Casualty Insurance Company and Type Tap Insurance Company underwrote a total of 42,000 policies last week. Ta. The subsidiaries were authorized to write up to 50,000 insurance policies in total.
The companies were also approved to write up to 50,000 insurance policies in November, according to the state Insurance Commissioner’s Office. However, HCI’s news release last week indicated that HCI does not intend to adopt these policies.
“We successfully navigated Citizen’s highly competitive depopulation process and achieved our fourth quarter new business goals based on October assumptions alone,” said Paresh Patel, HCI Chairman and CEO. said in a prepared statement. “The combination of our technology, which allows us to choose the insurance that best fits our underwriting and profitability criteria, and our high policyholder adoption rates, means we no longer have to make additional assumptions about annual balances.”
Read: Citizens Insurance focuses on backup coverage in case of hurricane
Last year, people took out 1,412,000 insurance policies, but initial population-reducing policies reduced that number. Still, Citizens dominates other insurance companies. For example, as of June 30, Citizens had just over 1.2 million policies, and the next largest insurer, State Farm Florida, had just over 1.2 million policies, according to an Office of Insurance Regulation report. There were 641,565 cases.
Citizens President and CEO Tim Serio said last month that the company expects to have a total of 891,184 policies at the end of the year, pointing to population reduction efforts. Serio and other officials said the private market is improving and, as a result, carriers are seeking insurance that they view as a good risk.
However, a potential downside for Citizens customers is that rates may rise if the policy is transferred to a private insurance company. In an effort to spur population decline, lawmakers approved an amendment in 2022 that would require Citizen customers to accept offers of coverage from private insurers up to 20 percent of Citizen’s premiums. .
Read: ‘What they’re doing is just rotten’: Homeowner claims surprise insurance cost thousands of dollars
State leaders want to minimize the number of Citizens policies, at least because of the financial risk if the state is hit by a major hurricane or multiple hurricanes. If citizens don’t have enough money to pay the claims, policyholders across the state (possibly including non-citizen policyholders) must pay what is called an “assessment” to cover the costs. There is a possibility that it will not.
Insurers will seek approval from the Insurance Regulatory Authority to participate in the depopulation round. In addition to TypTap Insurance Co. and Homeowners Choice Property & Casualty, other insurance companies approved to underwrite policies last week are American Integrity Insurance Company of Florida; Slide Insurance Co.; Monarch National Insurance Co.; Southern Oak Insurance Co.; Orion180 Select Insurance Company; Manatee Insurance Exchange. Florida Peninsula Insurance Exchange, according to information on the Department of Insurance Regulation’s website.
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