Long before the back-to-back hurricanes and the property damage they left behind, people in Florida were grappling with insurance issues, both in availability and price.
“Unfortunately, we’re still in crisis mode,” Mark Friedlander with the Insurance Information Institute said.
The Insurance Information Institute states that litigation issues have caused insurance companies to increase rates, restrict who they would insure, or both. This has made state-backed Citizens Property Insurance the choice for an increasing number of people.
“Citizens is going to be significantly less costly than a private insurer. In fact, in many cases, it could be 50 percent lesser than the premium you would pay on the private market,” Friedlander said.
“As companies leave the state or make their policies more restrictive, they come to us,” said Michael Peltier, a spokesman for Citizens Property Insurance.
This trend is not only happening in vulnerable coastal communities but also in large numbers in the central Florida area around Orlando.
“We have probably tripled our policy count in the past 14 months,” Peltier said.
Since the beginning of 2022, the number of Citizens customers in Seminole County has risen from just over 4,000 to just under 14,000. Orange County has jumped from 14,500 to nearly 37,000 customers, Lake County from 3,592 to 9,105 customers, and Osceola County from 6,136 to 14,532 customers presently. This totals almost 75,000 policies in four counties not on the ocean.
“We are taking care of our policyholders. It’s not a question of us being able to pay claims. We’ll be able to pay claims,” Peltier said.
The challenge is this, with Citizens carrying so many policies right now, a storm causing a major loss will likely cost everybody.
“The risk of us getting so large is that in the event of a big storm, if we exhaust our ability to pay claims, we have to go out to our customers and other Floridians with insurance policies to levy assessments to make up the deficit,” Peltier said.
“There are carriers opening up capacity again,” James Cleveland, a local independent insurance agent, said.
He added that he’s starting to see some optimism from private companies.
“We’ll broaden our appetite and start taking on some more risk, which is good because that will take the burden off of Citizens,” Cleveland said.
Cleveland cautioned homeowners to know the coverages they’re paying for before jumping at a lower price.