100,000 Citizens Property policies could shift to Tampa-based insurer
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Tampa-based insurer Slide is set to take over as many as 100,000 homeowners policies in October from Citizens Property Insurance Corp. — the state-run insurer — according to the Florida Office of Insurance Regulation.
Driving the news: Insurance Commissioner Michael Yaworsky approved proposals this week that allow four other private insurers to assume Citizens policies, too.
- The move could result in almost 200,000 policyholders moving from the state-backed insurer to the private market.
Why it matters: Floridians are already on the hook for the nation's highest average premium at nearly $6,000 a year, and experts told Axios that thrusting more consumers into the private market will leave them with costlier rates.
- Citizens held over 1.3 million policies as of June 30, with about 307,000 from Tampa Bay homeowners. Hurricanes and aggressive litigation have caused the state-run insurer to balloon in recent years.
Context: Florida lawmakers created Citizens in 2002 as an insurer of last resort — a backstop when residents can't find coverage in the private market. Now, it is the state's largest property insurer.
- Experts warned that its claims-paying funds could be exhausted if the state gets hit by a major hurricane. Florida law enables the state insurer to collect additional funds via an emergency surcharge on both Citizens and non-Citizens policyholders.
- The Legislature's remedy to drive consumers back into the private market, SB 2A which passed last December, barred homeowners from renewing their coverage with Citizens if they receive an offer from a private insurer that is no more than 20% more expensive than their current policy.
By the numbers: SafePoint received approval to assume as many as 30,000 policies; Southern Oak, 25,000; Florida Peninsula, 19,000; and Monarch, 10,000.
- Monarch already took over 17,239 policies in June, according to CBS Miami. The Office of Insurance Regulation approved a proposal in June to let Slide assume 25,000 policies in August.
The intrigue: Slide can now offer people an insurance policy over 10% more expensive than Citizens.
- Policyholders transferred from Citizens will face significant price increases since their current rates are far below the private market, the Tampa Bay Business Journal reports.
Be smart: The five insurers can choose which of the approved 184,000 policies they want to assume. So, not all policyholders will shift out of Citizens, according to 10 Tampa Bay.