Special to Realty/Builder Connection
The policy count for Citizens Property Insurance, the state-run insurer, surpassed 1.3 million in May, and it took on new policies at an even faster pace last month.
Citizens’ growth was part of the discussion at its monthly board of governors meeting in Jacksonville last month.
The company, which has become the largest insurer of homes, condos, apartments and mobile homes in Florida, is seeing its biggest growth outside the state’s risky coastal regions.
Citizens has 1,305,726 policies, a gain of 20,624 in May. Nearly half – 620,302 – are in Broward, Miami-Dade, Monroe and Palm Beach counties.
There are several reasons for the growth: Changes in state laws no longer require the insurer to charge the highest rates in Florida, and homeowners can opt for Citizens if their private carriers offer rates that are more than 15 percent higher.
Also, Citizens can now write a full policy for homeowners in the state’s designated windstorm area. This change spreads Citizens’ risk over a broader group of policies.
Gov. Charlie Crist and the majority of lawmakers believe these changes make Citizens more competitive and give consumers a break on soaring insurance rates.
Based on financial statements provided to the board, Citizens had $1.69 billion in surplus through April. Besides the surplus, Citizens has $8.8 billion in cash, notes, and credit lines that the insurer can tap to pay claims after a massive storm. It posted net income of $574.3 million, compared to net of $177.8 million in April 2006.
Citizens is trying to improve customer service by offering training for agents that write policies for the company as well as claims processing. There are about 8,500 agents in Florida who write policies for Citizens.
Jeff Grady, president of the Florida Association of Insurance Agents, said training is welcome because for many agents, Citizens is one of the few insurers writing new policies.
However, one private insurer, State Farm, is writing new policies very selectively. Rumor has it the company has lost policies to Citizens because its rates are substantially higher than the state-run company.
State Farm didn’t have a specific number on policies lost to Citizens.
But Justin Glover, a State Farm spokesman, confirmed that its agents can write new policies for homes that meet the 2001 Florida building code and are located more than a mile from the coast as long as the homeowner already has a policy with State Farm, such as auto or life, or buys another financial product from the company.
However, Citizens may still have work ahead on how it resolves claims. A state task force is meeting today in Tallahassee on how to work with policyholders who still have open claims from the 2004 and 2005 storms. At a similar meeting in Broward last week, the task force got an earful from angry policyholders about bungled attempts to settle claims and disputes on coverages and policy limits.