Billed as a "game-changer" and a "new option" for a New Year, Citizens Property Insurance Corp. rolls out its ambitious Property Insurance Clearinghouse January 27 with the mission of demonstrating to Florida homeowners the state-backed property insurer isn't necessarily their only or best option.
Established by the 2013 legislature's passage of Senate Bill 1770, the clearinghouse was borne of legislators' efforts to shrink Citizens' billions of dollars in storm-related liability by shifting policies to private carriers. In the process, Tallahassee hopes to give consumers greater access to Florida-based carriers while diminishing the risk of a so-called "hurricane tax" that would be levied on all Floridians in the event Citizens couldn't cover all of its hurricane-related claims.
"The Property Insurance Clearinghouse [is] a much anticipated effort to match policyholders with financially solid, private insurance carriers that in many cases can offer superior coverage at comparable rates," wrote Citizens CEO Barry Gilway in a November Sun Sentinel editorial.
Originally conceived with a January 1 launch date, Citizens announced in mid-December it was delaying the clearinghouse rollout for three weeks to do more testing and further safeguard policyholder privacy as their applications are shared through the system.
"When we introduce this, we want to make absolutely sure that it's going to be successful," Gilway told the Senate Banking and Insurance Committee at the time.
When it's ready, the clearinghouse will begin vetting new applicants for Citizens' multiperil homeowners policies. Averaging about 4,000 new policies a week before the clearinghouse, Citizens' new system will offer the initial seven companies signed up with the program the opportunity to review the properties' characteristics and offer competitive quotes for coverage.
According to SB 1770, Florida's newest property insurance reform law, which went into effect July 1, Citizens may write new homeowners coverage only for properties that cannot be covered by a Florida-licensed carrier or for those dwellings whose premiums with state-approved companies are priced more than 15 percent higher than comparable Citizens coverage.
Citizens' current policyholders will be subject to the clearinghouse for renewal coverage beginning second quarter 2014 and will be phased in over time.
Renewing policies are eligible for Citizens coverage if no private company offers comparable coverage or it is offered but the premiums are higher than Citizens' renewal rate.
"When their policy comes up for renewal, if there's a policy for comparable coverage and equal or less in premium, they would be ineligible for Citizens," said Citizens spokesman Michael Peltier.
Former Citizens policyholders who want to sign up again for coverage will be considered eligible, according to the company's website, if all of the following conditions are met:
• You have been declared ineligible for renewal with Citizens in the previous 36 months due to a private-market offer of coverage extended through the Property Insurance Clearinghouse.
• You accepted the offer.
• --You remain with the participating insurance company.
• --The rate on your policy has increased by more than 10 percent on an annual basis.
Returning policyholders' home characteristics would then be sent through the clearinghouse and would be ineligible for Citizens if comparable coverage with a premium equal to or less than the Citizens rate is offered by a participating company.
"All risks are subject to approval by Underwriting and must meet all Citizens Underwriting eligibility guidelines, as outlined in Citizens' Underwriting Manuals," the company notes on its website.
For more information, go to citizensfla.com/policyholder/clearinghouse.
Citizens' clearinghouse is scheduled to go live for new business, beginning January 27. The following will be onboard to offer multiperil coverage:
Bankers Insurance Group
United Property & Casualty
The following companies have elected to join the clearinghouse according to the accompanying dates:
Modern USA/American Traditions
Tower Hill Signature
Southern Fidelity Property & Casualty
Avatar Property & Casualty
Cypress Property & Casualty
* Pending confirmation
Source: Citizens Property Insurance Corp.Copyright © 2015, The Baltimore Sun