Understanding Citizens Insurance Depopulation Program in Florida
If you've received a puzzling letter from Citizens Property Insurance Corporation in your mail, you're not alone. Dive into our latest post where we break down Citizens depopulation program and its direct impact on your policy. Understand what the change means, identify the type of notice you've received, and discover your next best steps. Knowledge is your safeguard in these shifting sands!
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.
Roof leak insurance claims in Florida
What does your insurance policy cover if your roof leaks in Florida?
Over the past decade, Florida residents have seen a lot of changes to insurance policies and a lot of roof leaks that caused damage, both because roofs have aged, and because of a number of storms.
In the early 2010's many insurance companies got tired of repeated claims for damage caused by roof leaks and started to change their policies, but not all insurance companies followed suit. If you've had a roof leak, whether or not there is coverage is highly dependent on what your policy says.
VIP Adjusting's public adjusters will gladly provide a free policy review, but in the meantime, let's discuss a little more.
HO-3 Policies - "All Risk"
We've discussed this a few times, but the most common homeowners insurance policy is a form HO-3, often referred to as an "all risk" policy. This just means that the base homeowners insurance policy covers all "direct physical loss" or all "sudden and accidental loss" to the home and then excludes coverage from there.
If you have the broadest of insurance this standard Florida homeowners insurance policy, chances are a roof leak is covered, but unless the roof is first damaged by a covered loss, will likely not be replaced by the insurance company.
The (Recent) History of Roof Leak Claims in Florida
Hurricane Andrew hit south Florida in 1992. Hurricanes Charley, Frances, and Jeanne affected the Treasure Coast in 2004 with Frances and Jeanne making landfall in almost the exact same locations of Hutchinson Island, Sewall's Point, Stewart and Port St Lucie. 2005 saw Hurricanes Katrina make a Florida Landfall and then Wlima making landfall, both affecting the Treasure Coast as well.
Needless to say, this was a tough stretch for Florida roofs and St Lucie homeowners, and at the same time, in the 2008 to 2011 range roofs all across the state started to fail both from old age and as a result of the delayed appearance of damage from the 2004 and 2005 hurricanes.
At the time, nearly all homeowners insurance policies covered roof leaks under an exclusion for wear and tear, aging, lack of maintenance, etc, that said even though the roof failure for these reasons was not covered, the "ensuing water damage" was covered.
With the statute of limitations expiring on the 2004 and 2005 storms, and in the middle of a historic run without a Florida landfall by a hurricane, the insurance companies were seeing homeowners making a claim for a roof leak, holding the money, making another claim for another roof leak, holding the money, and repeating until they had enough money from the multiple claims to fully replace the roof that wasn't covered by the insurance policy.
Understandably unhappy with this practice, insurance companies sought to put limiting language in the insurance policies that would prevent this claims practice by homeowners.
When there is NOT coverage for a roof leak
One insurance company produced new policy language that was added as a "Florida Change" to its HO-3 insurance policies that read the insurance company does not cover loss for rain that enters the dwelling unless the exterior of the building is first damaged by a covered peril. That means no claims for roof leaks for old roofs. No claims for damage caused by water from leaking window seals. No water entering the property from outside unless the building is damaged.
Almost every insurance company in Florida followed suit. The language varies from policy to policy. Some insurance policies say the roof or walls must be damaged by wind or hail. Sometimes they say the exterior needs to be damaged by a covered peril. It's important to review your policy with your insurance agent or a public adjuster because this language could get you in trouble if you'd had damage.
When there is coverage for a roof leak
If you were lucky enough to have one of the insurance companies that didn't adopt this language, then you might have coverage for a regular roof leak due to a general failure of the roof, old age, wear and tear, lack of maintenance, or poor installation. We can count the number of Florida insurance companies on one hand that still issue these policies, though, and we still check the policies every time to make sure they haven't started with the exclusionary language.
VIP Adjusting's public adjusters are happy to go through your policy and provide a free review at any time.
Outside of having one of the good insurance policies, a roof leak would typically only be covered if your roof is damaged by a windstorm, hail, a fallen tree or tree branch, or, believe it or not, sometimes we see roofs damaged by stray bullets from people firing guns into the air on New Year's Eve or Fourth of July.
If you've found yourself on the wrong end of a roof leak, with damage to your property from rain entering the property, call or contact VIP Adjusting's public adjusters today for a free claim review.
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