Here’s what homeowners who left Citizens
Property Insurance are complaining about
Article Courtesy of The Tampa Bay Times
June 11, 2018
For a long time, Robert Peters resisted a push to
leave state-run Citizens Property Insurance Corp. to get homeowners
coverage from a smaller company he knew nothing about.
When he finally acquiesced three years ago, his policy shifted to
Homeowners Choice Property & Casualty Insurance — and he’s regretted it
"When I called over there, they tried to put me off and I said, ‘I don’t
like this runaround, I’ll just go over there and speak with them,’" he
Peters’ Citizens policy was one of about 800,000 that were taken out of
the company to go back into the private market over the last four years
through what’s known as a "depopulation" program. The program aims to
take some financial burden off the state insurer and give homeowners
comparable rates with private companies vetted for their financial
But there isn’t any vetting for customer service, leaving many customers
to grind their teeth with limited options.
On the positive side, the so-called Citizens’ takeout companies appear
to have a smaller ratio of complaints per policyholder than three of the
four largest private insurers in the state — and even compare favorably
to the company they’re leaving: Citizens.
Many complaints for the takeout companies touch on consistent themes. In
complaints filed with state agencies, posted on social media and
submitted to the Better Business Bureau, policyholders object to
difficulty reaching representatives, poor communication during claims
processes and seeing their rates rise with little explanation.
The "depopulation" program’s current incarnation ramped up in the early
2000s to lower the number of policies that Citizens had in its
portfolio. Fewer policies puts less of a financial strain on Citizens
and taxpayers, who end up subsidizing the low rates that Citizens
offers. It also makes the insurer more nimble when responding to large
events such as a hurricane.
"In the last couple years, we think we’ve returned to the role that we
were created for, and that’s to be able to insure insurable policies
that cannot find comparable coverage in the private market," Citizens
spokesperson Michael Peltier said.
Since 2014, just under 816,000 policies have been shifted from Citizens
to private insurers. Roughly 416,000 were moved in 2014, dropping
steadily each year. Last year, only 34,000 policies were taken out of
The Florida Office of Insurance Regulation must pre-approve every
company that would like to take a policy out of Citizens, verifying they
are financially stable.
Currently, there are 29 companies approved for take-outs. Just seven of
those took policies out of Citizens in 2017 — Avatar Property & Casualty
Insurance Co., Homeowners Choice, Maison Insurance Company, National
Specialty Insurance Company, SafePoint Insurance Co., Southern Oak
Insurance Co. and Weston Insurance Co.
The office of Florida’s Chief Financial Officer maintains a database of
complaint data against insurers and compares the number of complaints
against the number of total policies that company had at the time.
Of the seven companies, National Specialty had the worst track record of
complaints to policies from with one complaint per 4,428 policies,
though data was only available for 2017. Next were Southern Oak with one
complaint per 5208 policies from 2014 to 2017, Homeowner’s Choice with
one complaint per 5,812 policies, Avatar with one complaint per 7,917
policies, Weston with one complaint per 9,667 policies and SafePoint
with one complaint per 18,475 policies. Data was not available for
Citizens had a worse ratio than any of the seven companies for those
three years, with one complaint per 1,558 policies.
The Attorney General, which collects complaints against insurance
companies to a lesser extent, received 24 complaints against five of the
seven companies since 2016 — SafePoint (nine), Avatar (seven),
Homeowners (five), Weston (two) and Southern Oak (one). Two — Maison and
National Specialty — had zero complaints.
One of the most common complaints is that their rates have unexpectedly
Lynne McChristian, Florida representative for the Insurance Information
Institute, said some increase is to be expected.
"The rates of Citizens have been artificially low," McChristian said,
because Citizens has a mandated cap on rate increases. When
policyholders move to the private market, "what they’re getting charged
is the market price."
Citizens maintains that the burden of vetting is on OIR.
"They apply to OIR, so Citizens has no choice as far as who the takeout
companies are or who qualifies and who doesn’t," Peltier said. "That’s
solely the responsibility of OIR."
The rate at which Citizens policyholders are depopulated will likely
slow in coming years. Currently, Citizens has about 440,000 policies.
While the insurer hasn’t set a target policy count, Peltier said this is
fairly close to an equilibrium. Citizens estimates that there are about
450,000 policies that cannot get coverage in the private market.
"Because we’re sort of hovering around that number, the number of folks
that have been affected by the depopulation program has dropped
substantially," he said. "That probably won’t change unless we have a
big event and private insurers start non-renewing policies and Citizens
starts to increase our number again."
Even then, it will be less likely property owners will wind up inside
Citizens. The state created a clearinghouse in 2014 that checks all
applicants’ information against the private market to see if there is
potential for coverage other than Citizens. If a private company can
offer a policy within 15 percent of the rates that Citizens offers, that
applicant will have to accept it.
Complaints per insurer:
• Citizens Property Insurance Corp. 1 complaint per 1558 policies
• National Specialty Insurance Co. 1 complaint per 4428 policies
• Southern Oak Insurance Co. 1 complaint per 5208 policies
• Homeowners Choice Property & Casualty 1 complaint per 5812 policies
• Avatar Property & Casualty Insurance Co. 1 complaint per 7917 policies
• Weston Insurance Co. 1 complaint per 9667 policies
• SafePoint Insurance Co. 1 complaint per 18,475 policies
Source: Florida Chief Financial Officer