Citizens Property Insurance Corporation is on target to enter the 2015 hurricane season ready to pay claims on a once-in-a-century storm without having to assess all Florida policyholders.
Palm Coast, FL – December 11, 2014 – Citizens Property Insurance Corporation is on target to enter the 2015 hurricane season ready to pay claims on a once-in-a-century storm without having to assess all Florida policyholders, Citizens' top executive told members of the Board of Governors yesterday.
Florida-owned Citizens faced the prospect of an $11.6 billion assessment only three years ago, but an executive said it expects to have enough surplus and reinsurance coverage to protect its customer base, which has fallen from a high of nearly 1.5 million in 2012 to 727,000. Further policy decreases are also expected in 2015, President, CEO and Executive Director Barry Gilway told board members during a year-end review.
"We are on the verge of eliminating, in the event of the 1-in-100 year storm, the need for the dreaded 'hurricane tax' that has hung over heads of Floridians for far too long," Gilway said. "This is incredibly good news for Citizens policyholders and all Floridians who have been on the hook."
Citizens enters 2015 with its smallest policy count since 2005 after depopulation efforts, including a takeout program that has transferred more than 300,000 Citizens policies to private companies this year.
As Florida's "insurer of last resort," Citizens must levy assessments on all Florida property and casualty policyholders in the event it depletes its surplus and cannot pay claims following a major hurricane. Over the past three years, Citizens and other insurers have benefited from storm-free hurricane seasons and a global reinsurance market more willing to offer cost-effective coverage to the Florida market.
On Wednesday, the board approved a recommendation for Citizens to purchase adequate coverage to handle a 1-in-100 year hurricane.
In other business, the board reinstated the option for policyholders to cover scheduled, specific detached structures up to 70 percent of a home's Coverage A value. Citizens also will clarify language on attached-structure coverage to mirror private-market coverage.
© 2014 Florida Realtors®. Reprinted with permission.