The state-run Citizens Property Insurance Corporation is seeing a flood of new customers after private insurance companies pulled out of Florida, leaving thousands needing repairs for Hurricane Ian’s damage.
According to data posted on Monday on the company’s website, Citizens has seen an increase of over 14,000 policies from two weeks ago. Even before Ian, private insurance companies were pulling out of the state, dumping hundreds of thousands of policyholders onto Citizens, the insurer of last resort.
The company has seen massive growth during the past two years as private insurers dropped customers and raised rates because of financial problems. Citizens had 552,340 policies on Feb. 28, 2021, and 792,616 policies on Feb. 28, 2022.
Earlier in March, WINK News spoke to Tim Cerio, the CEO and president of Citizens Property Insurance Corporation, and he says the growth isn’t good.
“I will tell you, after Ian, the private industry as well as Citizens… we took a hit on our surplus, and so we have less surplus to pay claims, and we did before Ian—that’s why we’re out in the market trying to secure reinsurance, that’s why a lot of private insurers are trying to secure reinsurance and get their risk transfer programs in place,” Cerio said. “But the reinsurance market is tough right now… it’s a worldwide issue.”
Under Florida law, Citizens may write a new insurance policy only if coverage is not available from a Florida-authorized insurance company, or if premiums for coverage from Florida-authorized insurance companies are more than 20% higher than the premiums for comparable coverage from Citizens.
Cerio says this can cause problems for both the company and policyholders.
“The reason you talked about us being in the role of the insurer of last resort… the larger we are, if there is a problem, if there’s a major storm, and we’re hit, and our surplus is eaten up, the citizens of the state of Florida are going to have to foot the bill,” Cerio said.
Cerio says he hopes many more companies will come to Florida, because the more customers they have, the more people may have to pay out of pocket.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.