Nearly every week more bad news is shared about the Florida homeowner and their homeowners insurance – news that has caused thousands of customers to scramble for replacement coverage with little notice from their current insurance company. Now that they are racing for new coverage, many are finding that there are no options except for one – a quote offered by Citizens Property Insurance Corporation. Known as the Florida insurer of last resort, their name – Citizens – has become synonymous with owning a home in the sunshine state. Citizens was created as an insurer of last resort but has ballooned as private companies have shed policies and raised rates to deal with financial losses. So how do you get a quote offered by Citizens, what are the pros and cons of a Citizens policy, and in the end – should you even buy it? In today’s blog we discuss 1 part of a 3 part series and at the end you'll know everything you need to know about Citizens Property Insurance Corporation and a policy issued by them.
The sweetness of a low price…
Let’s start with the good part about Citizens – their insurance rate. If you qualify for their underwriting criteria, a rate offered by Citizens is typically less expensive then a similar rate offered by a private market insurer. In today’s marketplace, nearly 95% of the time a rate offered by Citizens will be the best homeowners insurance rate you can find. Because Citizens is a state-sponsored insurance company, rate increases imposed by them are generally capped by our state legislative body in an attempt to keep prices moderated for the average consumer – aka their constituents. Because of this mechanism, a rate offered by Citizens generally only increases slightly every year – if even at all. All of this means your rate charged by Citizens is going to be low – your next vote is important enough to the state leaders that they are willing to sacrifice the future operating performance of the state-sponsored insurance carrier to get you a cheap rate. Unfortunately for all Floridians, this type of band-aid fix to the insurance system further exacerbates the problem and leaves us all vulnerable to balloon charges down the road in the form of policyholder assessments.
The bitterness of no coverage…
With the Citizens “cheap” rate, it should come as no surprise that their coverage is often sub-par when compared to a similar quote offered by a private market insurance company. With homeowners insurance offered by Citizens, you’ll find that the following types of coverage fall a bit short:
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The maximum coverage offered by Citizens Property Insurance Corporation on a homeowners policy for a dwelling is $750,000 (Miami-Dade and Monroe counties are eligible for up to $1,000,000). Many private market insurance companies will offer coverage on values up to $2,000,000 and even more with underwriter approval. Considering the influx in property values and building costs due to COVID-19 and inflation, more and more homes are becoming too costly to rebuild and therefor are not eligible to be insured with Citizens.
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The maximum amount of personal liability coverage you can secure is $100,000 with Citizens. It’s not uncommon to see a private market insurance company offer $300,000 or $500,000 in personal liability coverage. It's important to point out that most personal umbrella insurance policies require you to keep $300,000 or $500,000 in underlying coverage. So if you plan on pairing your umbrella coverage with a Citizens policy you may need to think again - if you don't meet your umbrella's underlying requirement than that policy becomes useless and their coverage likely won't apply in the event of a claim.
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Citizens does not provide coverage for pool cages, carports, or other attached screened enclosures nor do they make such coverage available for purchase. Most private market insurance companies either include coverage for these structures or offer the ability to purchase coverage for them as an endorsement to your policy.
As you can see, the coverage offered by Citizens is often very limited. In many cases securing the coverage you may want, or need, would cost much more by purchasing a policy with Citizens as you’d then have to buy more coverage to fill in those gaps.
Join us for another blog in the next few days about Citizens – in part 2 we’ll talk about the potential of surcharges that are applicable to a Citizens policyholder but not applicable to a non-Citizens policyholder.
If you or someone you know is looking for a homeowners insurance quote but are running into roadblocks, contact us – Evolve Insurance Agency – we’re happy to partner with Citizens for the well being of our clients. They may not be the most desirable option – but in some cases they are the only option. When other agents refuse to work with Citizens, Evolve doesn’t – we’re here and ready to help keep your home insured. Give our team of friendly staff a call at 941-244-2760 or request a quote on our quote request page today.
David Kronk Jr.
Owner, Evolve Insurance Agency