TALLAHASSEE — Nearly 400,000 policyholders in Florida could soon find themselves with a new insurance company.
State regulators last week quietly signed off on a plan to let 10 different insurance companies take over nearly a third of all Citizens Property Insurance Corp. customers this November.
It wasn’t clear Friday how many Citizens customers in the Tampa Bay area will be affected, a spokesman said. Notices will start going out on Sept. 27.
Citizens now has more than 1.2 million policies in force, including 270,000 in Hillsborough, Pasco and Pinellas counties alone, making it the state’s largest residential property insurer.
Records show that more than 60,000 Citizens’ policies were transferred to other insurers in those three counties last year.
Customers will be automatically shifted to the new company unless they object.
Citizens, a not-for-profit government corporation, was formed in 2002 as the state’s insurer of last resort. Heavy hurricane losses had caused traditional insurers to stop writing policies in the Florida market.
Gov. Rick Scott and lawmakers have said Citizens needs to shrink, concerned it won’t be able to cover claims if the next big hurricane makes landfall.
The insurer has nearly $6.3 billion in reserves, but also estimates that the next major hurricane could wreak about $17 billion in damage.
Scott earlier this year signed into law a measure that mandated a comparison-shopping clearinghouse as a way to reduce the number of Citizens’ homeowner policyholders, along with the takeout program, also known as “depopulation.”
Citizens’ board has approved a request to raise homeowners insurance rates next year. The increases still have to be approved by the Florida Office of Insurance Regulation this fall.
For a $250,000 home in Hillsborough County, a policyholder faces an extra $184 per year in premiums. In coastal Pinellas, a home of the same value is looking at another $263. And in coastal areas of Pasco County, it’s an average increase of $221.
One of the companies slated to get 50,000 Citizens policies is Heritage Property Insurance and Casualty. The start-up insurer struck a $52 million deal with Citizens earlier this year to absorb policies.
A list of frequently asked questions about the policy moves can be found on Citizens’ website. Go to tbo.ly/1dXs3ar.