Receiving unexpected letters about your insurance can be a tad unsettling. Many homeowners insured through Citizens Property Insurance are finding this particularly true with the influx of communications about their depopulation program. So, let's make sure you're armed with all the knowledge you need to understand what's happening.
A Quick Look at Citizens Insurance
Citizens was founded as Florida's safety net for homeowners who struggled to get coverage elsewhere. Over time, however, this "insurer of last resort" began to encompass more homeowners than ever anticipated. From September 2020 to September 2022, the number of policies swelled from 511,055 to 1,071,850. This significant increase has made Citizens the number one insurance company in Florida. Although it was initially projected to reach between 1.5 to 1.7 million policies by the end of 2023, current forecasts anticipate around 1.3 million policies.
Why Is My Policy Being Moved? The 'Depopulation' Program Explained
Depopulation isn't as ominous as it sounds; it's simply a strategy to transfer policies from Citizens to private insurance companies. The state of Florida undertakes this effort to spread out insurance risk to protect taxpayer money, stimulate the private insurance market, and ensure Citizens maintains financial stability to handle significant claims, such as those following major hurricanes. Under this program, if a private insurer offers a rate within 20% of your Citizens policy, you won't have the option to stay with Citizens. Additionally, specific policies, primarily Commercial Nonresidential ones, are subject to automatic transfer, with no option for opt-outs.
Just Received your Depopulation Letter? Here's What You Need to Know
You'll likely receive a mandatory or optional notice, which will determine what happens next.
Understanding Your Mandatory Notice
Receiving a mandatory transfer notice indicates that a private insurer proposes a rate within 20% of your current Citizen’s premium. The process here is straightforward: if there's only one private market offer, you'll transition to the new insurer automatically, no action required. However, a choice must be registered if multiple offers are presented. Failing to do so means Citizens will make the selection for you.
Navigating Your Optional Notice
When the notice is optional, things are slightly different. This scenario arises if the private insurer's rates are above the 20% benchmark compared to your current Citizens policy. You wield more control here, having the freedom to decide whether to remain with Citizens or switch to the new insurer's terms.
Speak to an Expert
Navigating these decisions alone can be daunting so be sure to reach out to your insurance agent for guidance, or if you have questions about coverages or need a comprehensive understanding of your current policy, the team at VIP Adjusting is here for you. We offer free policy reviews to help you grasp the long-term implications and ensure you're making informed decisions. Remember, your premium remains unchanged until your policy's renewal, making now the perfect time for a consultation.
If you're interested in further insights about other Citizens initiatives, please check out our posts regarding mandatory flood coverage and their managed repair program.