Killing Citizens

Trying to kill the beast is proving harder than expected.

Or is it an intentional suicide ?

The strange (but perhaps normal as Florida is governed)  purpose of eliminating a perfectly functioning publicly sponsored Insurance Company  is proving harder than expected.

All the tricky ways to induce or to plainly force home owners into unknown private insurance companies is meeting a mass resistance from many property owners.

I never understood why Citizens (which re-insures a good part of its policies) is supposedly incapable of doing a good job at insuring homes if we get hit by a major hurricane, while other smaller companies could do it safely and pay their claims with no risks to the insured. 

About 20 years ago I was in the business of importing merchandise and I suffered a 100% loss of a whole cargo that arrived at Miami Airport.  The goods had been insured by the sellers in a California insurance company.

Guess what!  

When I made my claim this insurance company was in bankruptcy. I didn’t get a penny.  Just to inform you that Insurance companies can also take you for a ride. 

Safer than Citizens?  No way I can believe that.  

Citizens proved in previous hurricanes that it can do a perfect job; it paid its claims; it didn’t raise sensibly its premiums.  

And how do we know that in a future, confronted with heavy losses when hit by a sizable windstorm, these new companies will not just abandon and walk out of Florida?  The largest insurance companies have done it in the past, everybody knows that.

But it is too late now to save the victim.  

Just read the article I found on FloridaRealtors.org on Sept. 30, 2015

Fewer owners ditching Citizens for private insurance

Customers in Florida's state-run and largest insurer are getting choosier.

Fewer than half are accepting offers to switch to private insurers this year, down from 70 percent a year ago at Citizens Property Insurance Corp., records disclosed at a meeting Tuesday show.

Though 1.2 million transfer offers have been approved by regulators this year, just 141,680 customers have actually switched, records show. That's a significant slowing from record departures in recent years that have seen the company downsize from 1.5 million customers to 585,000, including about 60,000 in Palm Beach County.

The changes come as the company phases out, for example, warnings in letters to customers about 45 percent storm taxes if they stick with Citizens. The Palm Beach Post probed how unlikely such assessments have become after a storm, and noted the letters fail to mention customers could be charged another kind of storm tax if they switch to private carriers who fail.

Private insurers have continued to use the bold-faced warning nearly half a year after Citizens said it would cease, although officials said it is on the way out for upcoming offers.

To be clear, private insurers have not been making all the offers allowed by regulators, sometimes because they covet the same customers or simply choose not to act. In June, for example, private insurers did not make any of their 45,500 approved offers.

Still, out of the about 300,000 offers companies made in 2015, 47 percent have been accepted, records show. The outcome from about 46,000 offers in September is not yet known.

The acceptance rate declined from 69 percent in January to as low as 35 percent in March. It averaged 70 percent in 2014.

Why? Some of it has to do with a shift in the mix of customers remaining in Citizens that has created "uncertainty" in the acceptance rate, said Barry Gilway, Citizens' chief executive.

"It's very hard to nail down what that the ultimate takeout rate is going to be," Gilway told the company's depopulation committee Tuesday, a day ahead of a meeting of the company's full board.

Many customers with standard home policies, often priced close to what private insurers want, have already left. That leaves a higher proportion of others like coastal, wind-only and mobile home residents who may find fewer offers close to Citizens prices.

State-approved transfer offers differ from ordinary marketing pitches because consumers are automatically switched if they do nothing.

Gov. Rick Scott vetoed a bill passed unanimously this spring that would have beefed up consumer protections on Citizens offers. 

That has not slowed calls for consumers to get clearer information about what private insurers intend to charge.  Citizens officials noted Tuesday they are working to see that an estimated premium appears in certain October letters related to the offers.