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I’ve had capability to write outside of Citizen’s and I find people going to Citizen’s just because of the $500,000 guaranty fund. They feel Citizen’s will pay the claim up to $1M and they’d rather be there than chance a shortfall of coverage. Even when being out of Citizen’s represents large savings.
If you have capability in the admitted market and you still sell a Citizens you deserve to have your license revoked.
That may be a little harsh on PCL. But I guess it’s popular. I still have insureds that were originally with Magnolia, Argus, Nothern Capital, and Poe. They are a little reluctant to change. Let’s face it, when your client asks – “I received an opt out letter from Heritage Insurance, can you tell me what you know about their claims handling and tell me how long they have been in business?” It may be a case of the devil you know versus the devil you don’t know.
I have to disagree. You should be proactively shopping your Citizens book at every renewal. Takeouts are a necessary evil and a great way to get property back into the private market. Unfortunately a lot of the time it’s with new carriers. I never had to deal with Argus, Magnolia, or Northern Cap (thank God about that). The only thing I did was reap the benefit of their demise.
if they really wanted to depopulate Citizens- they would remove the contracts with the large direct writers whose only market is Citizens. We have actually had people cancel policies to go to Citizens with a particular direct writer.
I’ve always said that someone should need 2 active appointments with carriers ACTIVELY writing the line you wish to place with Citizens and this should be reviewed on a semi-annual basis. This would kill all of the business that comes in from certain captives, directs, and independent bucket shops with no real property markets.
Problem with that idea is it makes too much sense and as we all know Tallahassee likes to complicate things.
I believe Sen. Clemmons is barking up the wrong tree when he proposes more aggressive marketing efforts. I receive more print mail and other types of advertising materials offering auto & homeowners insurance than any other products. I am sure that consumers know where to search out insurance quotes. We don’t need the gov’t spending money on marketing.
I agree and disagree with your statement. We don’t need government spending money in marketing, that’s for sure. But as far as consumers, you give them too much credit. When their good neighbor tells them Citizens is it, many if not most believe it.
Sorry if this sounds simplistic, but why does the state interfere with the free market forces that work everywhere else? Rate competition among admitted carriers will seek equilibrium at the fair market rate for the exposure. Does the geriatric lobby have that much muscle to keep rates artificially low (shutting out private carriers)? If Citizens re-insured their book and priced their product for profitability like every other carrier should, the giant sucking sound would be from policies being pulled out of Citizen’s and finding a home in the competitive marketplace. Or am I missing something?
From what little I’ve read, it appears the entire purpose of Citizens is to provide low cost insurance. I don’t know who’s idea it was, but they really fubar’d it.