Posted On: June 24, 2009, 12:58 pm CDT

Posted By: DS

I will answer your questions.
1) When Citizens goes under, like after 2005 storms, the can asses all the other carriers in the state and then still pay claims. They are the only carrier that can do that. To your comments that they have no money is false, they have tons of money because all the policyholders in the state, regardless of carriers, are on the hook when they go bankrupt. All the others junky insurance carriers, like Poe just go under and you are left with a blue tarp for a roof. That is why Crist can force them to lower their rates and compete with private carriers because they can just get bailed out.
2) Some of the domestics might have a higher rating then State Farm Florida, but there is no backing there, they do not have the parent company as reinsurance, like in the case with State Farm. A number of these domestics have backing through the "Insurance Capital Build-Up Incentive Program, the state pension fund. I would hate to be a State employee and learn that my pension is being used to fund these carriers. (http://www.sbafla.com/fsb/Home/InsuranceCapitalBuildUpIncentiveProgram/tabid/413/Default.aspx)
3) And all the Independent Agents in Florida don't write for any AM Best rated carriers, as there are none in the state. Demotech who charges a fee to rate, rate all these little carriers and their rating is in question.