Citizens Chasing Big Rate Increase
|By James L. Rosica, Tampa Tribune, Fla.|
|McClatchy-Tribune Information Services|
Those days are long gone.
Jenkins and her family live in a two-story
"We've never had a claim," Jenkins says. "We've done the tie-downs for the roof, we got the hurricane shingles. It's an insurance company's dream.
"We've done all the right things," she adds.
As Jenkins and thousands of homeowners have learned, doing the right thing hasn't helped in the face of a looming insurance apocalypse in
Now, Citizens homeowners policyholders in the
The increases have to be approved by the
Citizens was formed in 2002 to insure "homes, businesses and condominiums whose owners otherwise might not be able to find coverage in the private market," according to its website.
"From a company standpoint, it will help them get into a better fiscal position," says
Insurance problems have vexed the state since long before Citizens was created.
Westcott cited "long and frustrating processes that impede families' ability to recover."
Citizens covers many homes and other properties that other insurers don't -- or won't.
But the company, a not-for-profit government corporation, says it can't charge as much as it needs to because of a 10 percent cap on rate increases. That's leaving it in the hole to pay for future claims.
"Citizens is committed to providing a top-quality service to our policyholders and strives to be transparent and open about our rate-setting process," spokeswoman
"Where Citizens has decreased or increased coverage, we have adjusted our rates and premiums accordingly."
The Citizens board last month approved a request to raise rates by an average of 7 percent statewide next year, costing its more than 1 million policyholders a total of an extra
Prices are going up for traditional homeowners insurance and sinkhole insurance. The cap on homeowner rates doesn't apply to sinkhole coverage, however.
Sinkhole premiums are being raised in phases in
Legislators, concerned that Citizens wouldn't have enough money to pay out claims after a big storm, this year passed a law creating a clearinghouse to pass homeowners off to more private insurers.
Over the next several years, the law also will gradually limit the value of homes that Citizens can insure, bringing it down from
The Citizens board also approved a deal potentially worth more than
"We called and said, 'Hold on,' and ran through all our bells and whistles," she says. "The guy says, 'Well, maybe you should have stayed with Citizens."
But Citizens was always underpriced for the marketplace, Childress says.
So instead of a last resort, "they became the go-to." That left the insurer historically underfunded, he says, though it now has a
"I laugh -- but I shouldn't laugh -- when I read their board saying they're holding strong and not raising rates too much, but they're going way above the 10 percent cap by doing it though the back door," he says.
He cites these examples of changes Citizens is making:
Decreasing "mitigation credits," or discounts for items such as replacement windows and wind-resistant roofing and siding,
Eliminating coverage for porches, pool enclosures and carports, which are most likely to be wrecked in strong storms.
Reducing coverage for liabilities, such as lawsuits against homeowners, from
Poole, however, says policyholders whose mitigation credits were removed or reduced couldn't confirm the presence of mitigation features on their homes.
The company also offers an appeals process for policyholders who want to challenge those reductions.
And she says the elimination of coverage for attached structures and the reduction in liability coverage "were made to bring Citizens more in line with its role as a 'residual market insurer,' which traditionally offers lower levels of coverage.
"In both cases, Citizens decreased premiums as a result of the coverage reductions," Poole says. "Any policyholder who had reduced coverage also paid a reduced premium in 2013 as a result."
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