The state’s largest insurer continues to takes steps to decrease its policy count. Citizen’s property insurance — which is owned by the state of Florida– is the smallest it has been since its creation. But, the efforts to decrease its policy holdings has some Suncoast residents on edge.
In 2012, Citizens had nearly 1.5 million policies on its books. In March of this year, that number dropped to under 595,000. Baldwin Krystyn Sherman, insurance agent Florence Conlan says the push to decrease the policies continues.
“The contracts they have do pay companies to take policies off their books. They’re essentially making a deal with these carriers to take these premiums and exposure,” added Conlan.
As part of that effort, Citizen’s has been sending out letters to policy holder informing them of other companies they should switch to. But some say the letters are a scare tactic because it uses language like this line: “If you stay with Citizens you could be forced to pay surcharges up to 45%.”
“If someone gets this and they don’t understand or read it carefully they are going to think that Citizens is going to raise their insurance 45% unless they go to another company — it’s a lie, its a pure lie,” said Sarasota resident John Mullarkey.
Mullarkey says he received several of the letters in the past few months and the wording of the documents are just part of his concern.
“The worst part is that the state of Florida taxpayers are paying for this literature to promote a private company. One of the companies I looked into that they said I should go to, they’re one of the most grossly underfunded companies out there,” Mullarkey says. “The whole thing is a fraud.”
Many of the companies being refered by Citizens are newly formed and have poor insurance ratings, and Conlan says there is also concern about their financial stability.
“While it’s good to balance out the market place and have standards insurers come along and take these policies off the books, there is a concern that some of these insurers are not properly funded themselves,” said Conlan.
But, Citizens officials say they have no control over who get the policies. Instead, the State ofFlorida’s Office of Insurance Regulation is in charge of the policy transfers. The department informs Citizens about policy changes. The Office of Insurance Regulation says they have an extensive and thorough vetting process to insure the companies getting policy transfers are sound.
Still, people like John Mullarkey are skeptical.
“All these new insurance companies are couple years old, when they fold Citizens, Florida, and you, me; we’re still it!”
