We often have clients (or prospective clients) calling us asking for a quote with Citizens for their home insurance policy because their neighbor or friend says their Citizens homeowners was cheaper. By law agents cannot offer a Citizens quote unless no standard carrier will accept you or if the standard insurance company is 15% more expensive than the Citizens premium – unless those agents do not have any alternative standard insurance company’s.
What is Citizens?
Citizens Property Insurance Corporation was created in 2002 by the Florida state government to provide property insurance for home-owners who could not obtain insurance elsewhere. It is a government owned and regulated not-for-profit, insurer of last resort. Due to lack of willing markets and rates that were below standard market rates – Citizens quickly went from being a market of last resort to the cheapest and largest insurer in the state.
While it may be true that Citizens has been cheaper, the State of Florida under the guidance of Governor Scott is working to change that. In addition to increasing Citizens premiums there have also been changes that reduce coverage making that policy less and less effective at the time of a loss when compared to other carrier policy choices. In fact by choosing to go with a less costly Citizens policy you may be making one of the most expensive insurance purchasing decisions you have ever made.
Florida Policy holders have been spared an increase this year, but the State government has proposed a SB1770 where a “clearinghouse” will be set up to steer policy holders to the private sector. Homeowners with Citizens will be pushed through a a clearinghouse that will force them into the private market if they receive a comparable insurance rate to that of Citizens.