Citizens Property Insurance Review 2016

Originally founded to provide affordable property insurance to struggling Floridians, Citizens Property Insurance has weathered its fair share of storms. Although this insurer has had difficulties in the past, it does offer a stable insurance product for many Florida property owners.

In 2002, Florida’s legislature created Citizens Property Insurance Corporation as a not-for-profit government entity. Its original purpose was to provide insurance coverage to Floridians who were otherwise unable to find private property insurance. After numerous storms hit the state, Citizens Property Insurance incurred large financial losses and began depopulating in 2013. Continue reading to learn more about depopulation and the types of property insurance that Citizens now offers.

What Is Depopulation?

At the peak of Citizen’s popularity, it insured approximately 1.5 million properties in Florida. After several years of historic storms, Citizens Property Insurance began experiencing major shortages, with some experts estimating it to have been more than $1 billion short at one point. This is why the Florida legislature passed Citizens’ depopulation to reduce the insurer’s and the state’s liability.

Essentially, depopulation moves a portion of Citizen’s customers back into the private market. The Office of Insurance Regulation approves all participating private market companies.

How Does Depopulation Work?

When Citizens Property Insurance identifies a policy for depopulation, it has the private insurance company that is taking over the policy send a letter to the policyholder. At this point, policyholders can decline the offer by returning an opt-out form to the new company. Policyholders who want to accept the new coverage don’t have to take any further action. The new property insurance company assumes the policy within 30 days.

What Happens If You Opt Out?

As part of Florida law, when a policy is up for renewal, it has to go through the Property Insurance Clearinghouse. This process determines if private market property insurance is available with a premium that’s equal to or less expensive than the policyholder’s Citizens policy. If another option is found, the Citizens policy won’t be renewed, and the policyholder is forced to switch insurance carriers.

Paying Assessments

After Hurricane Andrew in 1992, many private insurers left Florida. Citizens Property Insurance filled the gap and provided an affordable option for many years. Because of the shortages, current policyholders might be required to pay assessments if there’s a series of damaging storms or a major hurricane that causes Citizens to experience financial losses. Citizens Property Insurance charges assessments in three tiers: Citizens policyholder surcharge, regular assessment and emergency assessments.

  • Citizen’s policyholder surcharge is a one-time charge of up to 45% of the policyholder’s premium.
  • Regular assessments are one-time charges of up to 2% of the shortfall.
  • Emergency assessments may be single- or multi-year charges of up to 30% of the premium each year until Citizens’ deficit is paid.

Getting Property Insurance with Citizens

To be eligible for Citizens Property Insurance, you must meet one of the following eligibility criteria:

  • No available coverage from approved private insurance companies
  • Premiums from approved private insurance companies are at least 15% higher than the comparable policy from Citizens

If you meet these criteria, you must contact a Citizens agent to get a policy. The Citizens Property Insurance website features a look-up tool that makes it easy to find an agent in your area. Whether you’re interested in personal property insurance or commercial property insurance, the agent can help you get the type of policy that meets your needs.

Citizens Personal Property Policy Types

In addition to commercial insurance, which provides coverage for businesses, commercial buildings and condominium building owners, Citizens also offers personal property insurance for homeowners. Popular policy types include:

  • Homeowners: This policy covers single-family homes and owner-occupied duplexes, with coverage for the building, personal property, personal liability, living expenses and other structures on the property.
  • Modified Homeowners: This restrictive policy excludes several perils, including water damage. This option often fails to meet a mortgage company’s minimum insurance requirements, so you should check with your mortgage company before obtaining this coverage.
  • Dwelling Fire: This policy offers coverage for properties that don’t qualify for homeowners policies.
  • Condominium Unit Owners: This policy is available for owners who live in the unit as their primary residence. It provides coverage for the interior of the unit, personal property, liability and living expenses.
  • Mobile Homeowners: To be eligible, the mobile homeowner must reside in the mobile or manufactured home. This policy covers the home, personal property, personal liability and additional structures such as sheds, fences or garages.
  • Renters: Citizens offers two types of renters insurance, including a standard option for tenants who rent a home, condo or apartment. The other policy is specifically for tenants who rent manufactured or mobile homes. Both policies cover the renter’s personal property, personal liability and living expenses. The policy doesn’t cover the structure in which the policyholder lives.

Citizens also offers several optional coverages for an extra charge. Examples include sinkhole loss coverage, which provides coverage for structural damage caused by a sinkhole.

How to Get a Discount on Citizens Insurance

Actively protecting your home from damage can help qualify you for one or more of Citizens’ discounts. To qualify, you need to submit official documentation to your agent. Examples of discounts include:

  • Wind mitigation discounts for homes and businesses with wind protection, such as storm shutters and building materials rated to withstand high winds
  • Florida building code compliance discounts (offered to homes built after January 1, 2002)
  • Having centrally monitored burglar and/or fire alarms

Bottom Line

Citizens Property Insurance offers multiple coverage options at affordable rates. Because of the depopulation that began in 2013, having a policy with Citizens isn’t a sure bet. You may get a policy and end up going through the Clearinghouse when your policy is up for renewal. Before you make a decision, research all of your options and get a quote from at least two property insurance companies to be sure you’re choosing the right option for you.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published September 6, 2016
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