If you're a homeowner with state-run Citizens property insurance, expect a lot more upheaval and confusion in the coming months.
As reported in today's Miami Herald, Citizens plans to shed nearly a third of its current policies (roughly 400,000 of 1.2 million) in a massive wave of 'takeouts' by 10 smaller private companies on Nov. 5.
And then, starting in January, a new "clearinghouse" system will take hold where Citizens customers could be forced to go with a private firm they might not know, want or trust when their policies renew.
In the Nov. 5 wave, about 40,000 Citizens policies in Broward and Palm Beach counties have been slated for takeover, according to the agreements approved in late August by the state Office of Insurance Regulation.
Citizens customers should be on the lookout for the 'takeout' notices in the coming weeks, which are easy to mistake for junk mail because they come from the new companies.
For the November wave, Citizens customers still have the right to "opt out" (decline) the offers and stick with Citizens, but they must inform the new company in writing (via email, fax or regular mail) by Dec. 5. As I've written in the past, it's best to get in touch with your insurance agent/broker to discuss your options and intentions.
But starting in January, declining coverage will no longer be an option for Citizens customers selected by private carriers through the clearinghouse. As long as the new carrier gives them a renewal rate that's no higher than Citizens, the homeowner must go with the private carrier.
Some private companies say they will abide by the same 10-percent annual rate-hike cap as Citizens. Consumers who face steep hikes in the first three years are supposed to be able to return to Citizens and be considered renewing (not new) customers.
Many of the private firms doing takeovers and expected to be active in the clearinghouse are smaller, Florida-based firms. Many are relatively new and untested, forming after the last wave of major storms hit Florida in 2004-2005.
The 10 companies that will be handling the Nov. 5 takeovers (with the number of takeovers approved): Florida Peninsula (50,000), Heritage Insurance (50,000), Homeowners Choice (50,373), Southern Fidelity (30,000), Southern Oak (10,000), Tower Hill Preferred (34,415), Tower Hill Prime (38,430), Tower Hill Signature (24,578), United Property and Casualty (100,000) and Weston Insurance (6,000).
To learn more about these companies and the takeout/opt-out procedures, visit the Office of Insurance Regulation's takeout page at http://www.floir.com/Sections/PandC/TakeoutCompanies.aspx
And if you've been selected and have any trouble/confusion with the process, feel free to contact me at email@example.com.