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Citizens Insurance To Work Harder To Move Policies To Private Companies
November 30, 2012
As it writes 8,000 new policies every week, Citizens Property Insurance Corp. will soon do a better job of funneling policies into the private market, the state-backed insurer’s president promised Florida business leaders Thursday.
Speaking at a Florida Chamber of Commerce insurance summit, Citizens President Barry Gilway said he will brief Citizens’ board of governors in December about an effort that would require Citizens to try to place policies with private carriers before issuing policies itself.
Gilway said the company needs to be more aggressive in brokering policies because most Citizens policyholders are not aware that their lower monthly premiums are offset by assessments that will be levied on their policies in the event of a major storm.
“I think there is a way … to come up with an overall concept and approach that basically makes sure that every single policy gets shopped to every interested company before it enters the system,” Gilway said.
Regardless of those efforts, Gilway acknowledged that as long as Citizens’ rates remain lower than private carriers, the market will continue to drive customers to the company, even if Citizens’ coverage is not as good as most of its competitors.
As the state’s largest private insurer, with nearly 1.5 million policies, Citizens has been under increasing pressure from lawmakers and Gov. Rick Scott to reduce its role. In response, the insurer has rolled back coverage protections and reduced discounts to homeowners who make hurricane improvements.
“We’ve got the worst coverage in the marketplace,” Gilway said. “That’s by design. Is that stopping 8,000 policies a week coming through our front door? It’s not.”
The brokering program is the latest in a series of steps being taken by the agency to limit its exposure.
For example, the company’s underwriting committee rejected a proposal to reinstate coverage that was discontinued for secondary structures such as screened porches and detached buildings. Some policyholders have complained that the lack of coverage is preventing them locating their mobile homes in certain communities.
By The News Service of Florida
Comments
4 Responses to “Citizens Insurance To Work Harder To Move Policies To Private Companies”
All insurance is a gamble. You are betting you will need it, the company is betting you won’t need it. Or at least as much money as they receive as a whole.
Actuarilly speaking, they know some of those they insure will need money and about how much they will have to pay them. They set their rates high enough to pay the expected payments but low enough to attract you to them rather than some other insurance company.
You know you MIGHT not need an insurance payout yourself but you figure it is safer to pay a small amount in the chance you need to pay out a large amount so they will cover that amount.
The problem with Citizens is that they are charging less than they expect to have to pay out and that is because the state set them up that way. The more they can shed, the less we, the citizens of the state, will have to bankroll them.
David for safe bets
Keep in mind, insurance co. are there to COLLECT money, not to PAY out money. Insurance co. are second only to the goverment at being crooked!!
Make the citizens premiums higher than private polices cost. Having to fund these peoples insurance is just another form of WELFARE Let them pay their way or move. All my insurance polices are assesed to support citizens ins. Whether its homeowners are auto insurance, its charged a fee ffor citizens. Its a load of bull!!
Are these policies issued by Citizens being issued to homes/businesses that are on the Coast (or close to the coast)? If they are that is why they can’t get insurance. Many large insurance companies just doubled their rates this year, so some retired people have no insurance now because they can’t afford the increase…and they live inland and have never had any hurricane damage. Changes need to be made in the way insurance companies do business.