These 7 Florida insurance companies OK'd for 168K Citizens takeout policies. What to know
Citizens Insurance continues to make up more ground as it attempts to shave off excess home insurance policies through its “depopulation” effort as several new Florida insurance companies were approved to take over more policies.
Seven orders were signed by Insurance Commissioner Michael Yaworsky in the last week, opening up 168,000 Citizens' policies for the assumption offers.
Citizens, which has now crossed more than 1.4 million policies, has grown too big, too fast and concerns are growing that a major storm in Florida could deplete its ability to pay claims.
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The Florida Office of Insurance Regulation (FLOIR) is using the Citizens Depopulation Program to offer private-market coverage to its policyholders through these takeout policies to offset the sudden financial burden Citizens has taken due to its explosive growth.
Despite continued growth in the face of new companies assuming nearly 300,000 policies, Citizens President and CEO Tim Cerio expects to see the policy count decrease to about 1.3 million by the end of the year.
Several large insurance companies such as Farmers Insurance, Progressive Home and AAA, who have announced rounds of non-renewals and even outright leaving Florida in some cases, have paved the way for new property and casualty insurance companies to enter the market.
Seven new Citizens takeout orders
The FLOIR approved seven new orders for Citizens Depopulation Program, which would impact 168,000 Citizens policyholders. Here’s the list:
Edison Insurance for 10,000 policies
TypTap Insurance for 25,000 policies
Florida Peninsula for 15,000 policies
SafePoint Insurance for 16,000 policies
Slide Insurance for 75,000 policies
American Traditions for 12,000 policies
Orange Insurance Exchange for 15,000 policies
The effective date for the latest round of takeout policies starts on Dec. 15.
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Who is Edison Insurance?
Edison Insurance Company is a Florida-based home insurance company that was founded in 2005. Edison only offers coverage in Florida, which means they truly know their coverage area and can offer competitive pricing and coverage, according to the company.
Edison has a Financial Stability Rating (FSR) of “A or Exceptional” from Demotech Inc. for its long-term stability. The company does not have an A.M. Best Credit Rating.
A.M. Best is an independent insurance rating agency that provides credit ratings and financial data products for the insurance industry, according to nsure.com. Demotech Inc. specializes in providing ratings and detailed financial analyses of regional and specialty insurers.
Who is TypTap Insurance?
TypTap Insurance is a newer company that was founded in 2016 and funded by HCI Group, Inc. HCI Group deals in homeowners insurance, information technology, real estate and reinsurance. TypTap Insurance has received an “A or Exceptional” FSR from Demotech.
Who is Florida Peninsula?
Florida Peninsula began writing home insurance in Florida in April 2005. It sells property coverage exclusively, insuring nearly 150,000 properties throughout the state through a network of 2,500 independent agents. Florida Peninsula has an “A or Exceptional” FSR from Demotech.
Who is SafePoint Insurance?
SafePoint Insurance is a property and casualty insurance company based in Tampa that specializes in coastal regions along the U.S.
SafePoint works with independent insurance agents to sell its products and holds an “A or Exceptional” FSR from Demotech.
Who is Slide Insurance?
Slide Insurance is a Tampa-based property insurance company that was founded in 2021 by insurance insider Bruce Lucas. Slide uses AI and machine learning to optimize streamline and optimize everything from its underwriting decisions to its customer experience. Slide Insurance holds an “A or Exceptional” FSR from Demotech.
Who is American Traditions Insurance Company?
American Traditions Insurance Company is a property and casualty insurer based in Pinellas Park. The company has been writing policies in Florida since 2005. It launched its affiliate insurance company, Modern USA Insurance Company (MUSA), in 2007 before merging with it in 2018, becoming the largest manufactured home insurer in the industry. American Traditions earned an “A or Exceptional” FSR from Demotech.
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Who is Orange Insurance Exchange?
The Orange Insurance Exchange is the newest kid on the block in Florida. The property and casualty insurance company was approved to begin writing insurance in the state on Sept. 1 but won’t begin until after the 2023 Atlantic hurricane season ends on Nov. 30. Orange Insurance Exchange is starting with $25 million in surplus, according to the Insurance Journal. The firm is in the process of earning FSRs.
What is depopulation?
The Citizens Depopulation Program is a requirement of Florida law that works to offer private-market coverage to its policyholders.
Citizens is a state-backed insurer that was created in 2002 as a last-resort option for homeowners who couldn’t get comparable coverage in the private market. The company was never meant to provide homeowners a cheaper option for coverage, but skyrocketing rates in the private market have allowed many homeowners to qualify for coverage who normally wouldn’t.
The savings Citizens policyholders have found is somewhat of a double-edged sword, which could end up costing them more if a costly storm puts the company in a position where it isn’t able to payout all of its claims.
Should payouts from policyholder claims dry up Citizens’ funds, state law requires that the company levy assessments from policyholders and non-policyholders until the deficit is paid.
Those assessments can be substantial, according to Citizens’ website, which states that policyholder assessments could be up to 45% of their premium due to the Citizens Policyholder Surcharge, quickly erasing any savings policyholders enjoyed.
Do Citizens takeout policies have comparable coverage?
Takeout policies are required to have similar coverage to what Citizens provided in the original policy. In many cases, the coverage can be better depending on which company is assuming the policy.
To compare the policies, find the declarations page of your most recent policy and compare it to the takeout policy. More specifically, you'll want to look at these coverages:
Coverage A (In Florida, this is the replacement cost value of your home)
Coverage B (Other structures not connected to the home such as a shed)
Coverage C (Personal property)
Personal liability
Sinkhole loss deductible
Limited fungi, wet or dry rot, yeast or bacteria coverage
Permitted incidental occupancies; allowed in other structures
Loss assessment coverage
Cosmetic or aesthetic damage to floods
Structures open to air (Not covered by default, so this is one to double-check)
Flood insurance is not covered under HO3 home insurance policies and is separate, so it won't be mentioned in the takeout letter.
Coverage limits change year to year even under the same companies, so slight changes may not be a cause for concern. Talk to your insurance agent if you have any questions.
This article originally appeared on Pensacola News Journal: 7 new Citizens Insurance takeout companies approved for 168K policies
