TALLAHASSEE — Citizens Property Insurance Corp. continues to shed customers, with about 160,000 expected to voluntarily move to private insurance this week, the company’s vice president told lawmakers on Tuesday.
And fewer new policies are being sold: “We are quoting less, we are writing less on the front end,” Christine Ashburn said. “We’re seeing the (private) market slowly but surely pick up.”
Ashburn spoke at a meeting of the Florida House Insurance and Banking subcommittee.
The nonprofit government corporation estimates that nearly 500,000 policies will have been taken out and returned to the private market by the end of this year.
At last count, Citizens had nearly 242,000 customers in Hillsborough, Pinellas and Pasco counties, down from 270,000.
Gov. Rick Scott and state lawmakers have told Citizens to shrink, concerned that it won’t be able to cover claims if the next big hurricane hits the Sunshine State.
Citizens reduced its policies “from a peak of 1.5 million to 1.2 million and is likely to go below 1 million policies early next year for the first time since mid-2006,” company spokesman Michael Peltier said.
In fact, Ashburn told lawmakers the total number of policies is now down to 1.05 million.
Its total exposure, including commercial accounts, is $370 billion but the 100-year probable maximum loss is $18.6 billion, records show.
It also has set aside $6.8 million in surplus and re-established coverage options for mobile homeowners, builders and others, Peltier said.
To fulfill its mission as an insurer of last resort, Citizens would cover only homes on the coast, older homes and mobile homes throughout the state, homes in sinkhole prone areas, high-rise condos, commercial buildings and rentals, according to a report to lawmakers.
In September, insurance regulators allowed Citizens to charge an estimated average rate increase of 6.3 percent, down 1.6 percent from the original request.
Homeowners who don’t live near the water are estimated to face only a 4.4 percent increase. The new rates go into effect in the beginning of 2014.
Citizens also has a policy-comparison clearinghouse in which agents can shop for consumers to find comparable offers of coverage from participating private-market carriers, or “takeout” firms. That system goes live in January.
Rep. Larry Lee, D-Port St. Lucie, who is an insurance agent, asked how responsive the new system will be.
“It’s supposed to be a fairly instantaneous process,” Ashburn said.
Scott earlier this year approved a law mandating the clearinghouse as a way to bring down the number of Citizens’ homeowner policyholders.
Some of those takeout companies have since filed requests for rate decreases with insurance regulators, which insurance agents say is a sign that private insurance rates are at least stabilizing.
Experts advise customers to do their research when looking at takeout insurers, including asking about the company’s track record for paying out claims, its cash reserves, and whether it has plans to increase rates.
And, as Ashburn said, “if there is no other market for you, of course you can come to Citizens.”