Citizens Property Insurance customers in Florida have been receiving letters informing them of offers for coverage from different private insurance companies. This initiative is part of a state solution to reduce the number of policies held by Citizens, which is the state-run insurer of last resort. In recent years, Citizens has written over 1.3 million policies, contributing to an ongoing insurance crisis.
However, the new premiums being offered by these private insurance companies are often higher than what customers are currently paying. For example, in one case, a Citizen’s premium of $5,053.00 has been replaced by an offer from Slide Insurance for $6,178.00 – an increase of $1,125 per year. The deadline for customers to decide is October 5.
Greg Buck, an independent insurance agency owner, suggests that it may not be financially beneficial for customers to accept these higher premiums. Buck explains that if the new offer is more than 20% higher than the current premium, customers are not obligated to accept it. Based on his clients’ experiences, Buck informs that the majority of offers received so far have been more than a 20% increase, indicating that customers have the option to decline.
However, there is a concern that Citizens premiums may increase even more in the future if customers choose not to switch to the private insurance companies. The letter received by customers warns of potential surcharges as high as 45% more, even if there is no storm damage in their area, but Citizens has to pay for damages elsewhere. Although the possibility of these surcharges is uncertain, Buck emphasizes that it is difficult to predict when or if they will be imposed.
Given the uncertainty and potential financial burden, Buck advises that it may be wiser for customers to stay with Citizens. He maintains that in most cases, it is still more advantageous to remain with the state-run insurer, as it is unlikely that individuals can afford to pay more for insurance.
Ultimately, it is important for Citizens Property Insurance customers to carefully consider their options and evaluate the potential financial implications before making a decision.