| Citizens Property Insurance is Florida's state run | | | | seasons. Policyholders are concerned that if their |
| home insurance company. It was formed to offer | | | | home has a hurricane claim in 2009, that their |
| home insurance coverage to consumers unable to | | | | home will be "on-the job" training for the |
| find coverage from a private Florida home | | | | customer service staff at these newly formed |
| insurance company. Homeowners in Florida turn to | | | | companies - inexperience that could cause delays |
| Citizens for coverage due to one or more risk | | | | in paying claims fairly and prompty. |
| factors that make their home undesirable to | | | | Many of these take out companies milk the policy |
| private insurance companies. These risk factors | | | | base they assume and never go on to write any |
| include among other things - the home's age, | | | | new business beyond the policies they take out |
| distance from the coast, construction materials, | | | | of Citizens. Companies that don't diversify their |
| and roof type. | | | | policy base beyond the original take out policies |
| Citizens Property Insurance depends on a mix of | | | | are more vulnerable to collapsing after a major |
| pre-event hurricane borrowing and imposing after | | | | Florida hurricane. |
| the storm surcharges on all Florida home | | | | Last but not least, Florida insurance agents who |
| insurance policies if it doesn't have the money it | | | | originally wrote the policies that are being |
| needs to pay claims. | | | | removed from Citizens might not want to |
| This potentially lethal mix of high risk homes along | | | | become an agent with the new take out |
| with being under funded is one of the reasons | | | | companies - even if it means they will lose the |
| that it's always been a good idea to try to reduce | | | | business. They simply might not want to add a |
| the number of policies in Citizens Property | | | | new company to the mix of companies they |
| Insurance. The smaller the number of policies that | | | | already represent. Or they could have real |
| the company has, there is less chance that | | | | concerns about the financial stability of the new |
| policyholders across Florida will have to pay large | | | | take out company. The agent can't stop |
| special assessments for many years after a | | | | consumers who want to benefit from a take out |
| major hurricane. | | | | offer. However, an agent's reluctance to be an |
| One of the ways that is done is by encouraging | | | | agent with a particular company should at a |
| private home insurance companies to assume or | | | | minimum cause a consumer to pause and move |
| "take out" policies currently covered by Citizens | | | | forward with caution. |
| Property Insurance - hence the name "take out | | | | Here are the questions you should be asking your |
| companies". The take out process is also referred | | | | current Florida insurance agent if you are with |
| to as depopulation. | | | | Citizens and you are sent a take out offer - |
| Attracting companies to assume or take policies | | | | before you decide whether to move your Florida |
| out of Citizens Insurance Florida is good public | | | | home insurance from Citizens to the new take |
| policy. | | | | out company: |
| In addition to moving more of Florida's wind risk | | | | How long has it been in business? Has it ever |
| to the private market, customers may also get | | | | handled Florida hurricane claims before? If so, how |
| better customer service from a private take out | | | | many customers have filed complaints against |
| company that doesn't have a massive base of | | | | that company for inadequate customer service. |
| over 1 million customers like Citizens. They are | | | | How financially strong is the take out company? |
| also usually rewarded with annual insurance | | | | What are its financial ratings? How diversified is |
| premiums that are lower than what they were | | | | the company's policy base across both Florida and |
| paying Citizens. Finally, policyholders with private | | | | other states? Are the policies being assumed by |
| insurance companies are subject to smaller special | | | | the take out company in North Central Florida, or |
| assessments after major hurricanes. | | | | in hurricane ground zero along the South Florida |
| Florida take out home insurance companies come | | | | coast? |
| to life with an immediate customer base of | | | | If your agent is not willing to become a new |
| policyholders without having to make the usual | | | | agent of one of the take out companies, that |
| investments in marketing and adverting. When | | | | alone should be a warning sign to you. By taking |
| these companies are initially capitalized, its easier | | | | this position, your agent is risking the loss of the |
| for them to raise money because investors know | | | | commission your policy. Find out from your agent |
| that the take out companies will have an | | | | why they don't want their agency to accept an |
| immediate customer base and money coming in | | | | appointment with the new take out company. |
| immediately after they assume policies from | | | | The answer your agent gives you, might tell you |
| Citizens. | | | | everything you need to know about whether you |
| Despite all the good that comes from reducing | | | | should accept the offer from the new take out |
| the number of Florida home insurance policies in | | | | company. |
| Citizens Property Insurance, the take out program | | | | Last but not least, ask your agent if there are |
| is not without its problems. | | | | any other Florida home insurance companies who |
| Policyholders are often concerned about the | | | | might want to cover your home. The private |
| financial stability of the take out insurance | | | | home insurance market in Florida is always |
| companies. Many are start up companies and | | | | changing and there might be other companies |
| have a small surplus available to pay claims of $20 | | | | now covering homes like yours that are a lot |
| million or less. With Florida hurricane claims | | | | more stable. |
| averaging $30,000 or more, even after a | | | | Don't forget, if you don't bother to investigate |
| company's reinsurance kicks in, there might not | | | | these take out insurance companies, you will be |
| be enough money to pay all of the claims. | | | | the one that could be living with an unpaid claim |
| A significant number of take out companies were | | | | after the next Florida hurricane. |
| created after Florida's 2004/2005 hurricane | | | | |