Florida’s Citizens Signs with 10 Insurers to Take Nearly 400,000 Policies

September 3, 2013

  • September 3, 2013 at 10:54 am
    Hillsborough Agent says:
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    That’s great….until the insured gets the renewal offer from the takeout company and it’s 50% higher (or more) than they were paying with Citizens.

  • September 3, 2013 at 1:31 pm
    Mr. Solvent says:
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    It’s about to get much more fun than that Hillsborough. Wait until you put through a Citizens app for $2,000 and Company XYZ comes in at $2,295 and the customer has to take it. That will be fun for everyone!

    • September 3, 2013 at 1:50 pm
      SWFL AGENT says:
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      Mr. Solvent, I know very little about the upcoming Clearing House process. I assume, or would hope, that under your example that the company willing to take the policy at $2295 is “open” in the voluntary market. Not just the Clearing House. For example, you show risk as unacceptable due to the zip code,age, etc and then the carrier turns around and accepts it in the Clearing House process. Do you know?

    • September 3, 2013 at 2:15 pm
      Susan says:
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      It’s the same as the current 15% rule for the clearinghouse. The premium has to be within 15% or else then can go with Citizens. A lot of agents don’t use the 15% rule now – they just find a company to decline it and write it with Citizens anyway for the lower premium. I like the clearinghouse idea, but let’s see how it works.

      • September 3, 2013 at 2:31 pm
        Mr. Solvent says:
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        Not exactly the same but the same idea. I won’t write a Citizens policy if there’s a private company willing to write at all. That’s been agency policy since the stupid rule was put in at all.

        That said, I have an issue with putting through an application at $2,000 only to have a private carrier come in at $2,295 and I go to the customer with my hand out.

  • September 3, 2013 at 1:57 pm
    Mr. Solvent says:
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    No, I don’t know for certain how it’s going to end up.

    What we know as fact is IF the clearinghouse carrier comes in at $2,295 on that $2,000 risk, then the customer has to take it. Maybe the reason we’re putting it through is because our private carriers were all $2,600 and the customer is cost sensitive.

    I anticipate a lot of agent and customer confusion at a minimum. It’s good in the fact that it will likely keep potential policies out of Citizens.

  • September 3, 2013 at 2:54 pm
    Renoscs says:
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    What is the Best’s rating for each of these 10 carriers? How many are A- or better?

  • September 3, 2013 at 3:08 pm
    Ben There says:
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    I would bet none of the companies have Best rating. We went thru several unrated companies in 04 and 05 during hurricane season. What a nightmare… Will never go thru that again. Use Citizens, at least they will not go bell-up during the storm season. If I need to battle with someone — would rather Citizens than useless, unfunded, claim challenged insurance companies ( if you dare to call them that)… but it looks like the new clearing house will take that choice out of my hands.

    • September 3, 2013 at 4:20 pm
      Mr. Solvent says:
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      You’ve never been there Ben if you’re using Citizens as a viable alternative to the private market. 2004 and 2005 Citizens claims would make certain bad actors in this industry blush.

  • September 3, 2013 at 3:56 pm
    Ivan del Jesus says:
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    my bet is that none of the insurance companies will have an A+ or even an A- from Am Bests

    You never see any of the REAL Insurance Companies, Nationwide, State Farm, USAA, CHUBB write wind on their admitted program

    If we have a Cat 2 or 3 Hurricane, ALL these 10 companies are dead and FIGA will be left holding the bag

    the entire program is a joke.

    The office of Insurance Regulation should REQUIRE that all these Mickey Mouse Companies to be regulated by a Reputable Rating authority

    • September 3, 2013 at 4:20 pm
      jay neal says:
      Hot debate. What do you think?
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      The companies are in fact rated by a highly reputable rating authority, Demotech. Leading up to the Poe Group failure Demotech withdrew its favorable rating nearly a year before AM Best. After Andrew several AM Best A rated companies failed. We compared Demotech ratings with A.M. Best as did FSU. Demotech’s performance was actually better overall than A.M. Best. Demotech is also requiring deeper reinsurance buys than in the past. Florida domestic carriers now account for 50% of the property market and are for the most part strong. Agents should also be telling policyholders about assessment risk with Citizens. 45% at renewal vs. a maximum 2% with private carriers.

      • September 3, 2013 at 11:58 pm
        Renoscs says:
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        Demotech? PLEASE!!!! They are nothing more than a wanna be Best’s. Best’s has been around for more than 100 years and is the primo rating authority of insurance carriers. If anyone takes Demotech over Best’s, they are absolutely foolish, to say the lease. All that being said, how does Demotech rate these 10 carriers?

        • September 4, 2013 at 8:12 am
          Hillsborough Agent says:
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          My stapler is Demotech rated A.

          • September 9, 2013 at 10:29 am
            Tom says:
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            thank you for my laugh of the day
            :-)

        • September 4, 2013 at 10:01 am
          jay neal says:
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          Best might be over 100 years old and larger, but facts are facts. Demotech ratings have simply held up better. They have much higher financial strength standards than OIR, closely review takeout companies, often requiring additional capital or deeper reinsurance buys. They are doing a great job for insurance consumers. http://www.demotech.com has the ratings.

          • September 4, 2013 at 10:14 am
            SWFL Agent says:
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            Jay, I don’t know enough about rating criteria to debate the AM Best versus Demotech argument other than the fact that most companies that qualify for Demotech could not secure a Best rating. Most don’t even try for a Best rating because it’s not attainable. But no company has really been tested, from a storm perspective, since Demotech has become the norm in the past several years. So yes, for now, Demotech has been “doing a great job for consumers”. Let’s hope they’ve accurately assessed/rated our markets.

          • September 4, 2013 at 12:13 pm
            Renoscs says:
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            Baloney!!

      • September 4, 2013 at 5:35 pm
        The Fieldman says:
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        I am not a fan of Demotech or Best. They PAY for a rating in both places. I’ll take a C from Weiss before a B++ from Best or an A” from Demotech.

      • September 5, 2013 at 2:18 pm
        Ivan del Jesus says:
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        Dear Mr. Jay Neal:

        The question is: Is Demotech receiving ANY form of compensation from the Mickey Mouse Insurance Companies?

        Any Form of Compensation?

        Who Owns Demotech? Is Demotech a Publicly traded Company on the NYSE, NASDAQ?

        Do Any of the Mickey Mouse Insurance Companies have any form of ownership or any financial interests on Demotech?

        • September 6, 2013 at 9:55 am
          Mr. Solvent says:
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          Debate rating companies all you want, but don’t think for a moment that an AM Best rating is free.

        • September 9, 2013 at 2:15 pm
          The Fieldman says:
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          Companies must pay for a rating through Demotech and Best. Weiss does not charge. Weiss takes the statutory statement as filed with the home state and runs the numbers through certain stress tests to determine how the company will perform under certain circumstances.

          Once upon a time Best did not charge nor could a company advertise in Best’s Review magazine as Best did not want even the appearance of a conflict. Of course, that is no longer the case.

        • September 10, 2013 at 9:21 am
          jay neal says:
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          Both Demotech and A.M. Best charge for their ratings.
          Both Demotech and A.M. Best are privately held companies.
          No insurance companies have any ownership of either company.
          Both companies ratings are accepted by Fannie, Freddie, and HUD for mortgages.

          What you are really challenging is the integrity of the ratings process. But we see the process working. Recently Demotech required Heritage to significantly increase surplus and reinsurance, well beyond the requirements of state regulators. Read about it here: http://blog.homeinsurancebuyers.org/heritage-property-casualty-insurance-company-maintains-its-demotech-rating/

        • September 10, 2013 at 11:28 am
          Jake Peters says:
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          A review of the public records for the state of ohio shows that Demotech is privately held by two individuals. No ownership by rated carriers. Also looks like Demotech now rates all of Allstate’s P&C companies and all of Nationwide’s P&C companies.

      • September 6, 2013 at 2:18 pm
        Jack Allen says:
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        Ever seen a B rated demotech rated company? Didn’t think so. You suckers selling that stuf better have some deep E&O coverage. Last I heard a lot of E&O carriers wouldn’t even coverage UPC.

  • September 3, 2013 at 4:07 pm
    Wayne 2 says:
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    Here in Pinellas County many carriers are taking them out of Citizens but won’t allow me to write them voluntary due to distance to coast line guidelines or age of roof guidelines. It is frustrating when it isn’t eligible for the private carrier but they will assume it out of Citizens. Of course they pay their agent less commission on the Citizens business they assume and I am sure that plays in to it. I’ll gladly take a clearinghouse offer if they can get within $250 of a Citizens price and advise the client to take it with a smile.

  • September 3, 2013 at 7:47 pm
    Jeff Cavicchi says:
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    There needs to be some protection in place for the consumers. When the policies are taken out, the insured has 30 days to reject or it will be taken out. All the while not knowing what the premium will be. Come renewal the insured finds out that the premium has increased by 60% as the case with Several of my American Integrity takeouts. The ironic part is that American Integrity is writing the same policy in “voluntary” market for 1K and a similar home in the “take out or involuntary” is $1600 for less coverage just because it is a Citizens policy. It is like a free for all with some of these take outs. they have the insureds in a no win situation.

    • September 4, 2013 at 9:56 am
      Mr. Solvent says:
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      That consumer can go back to Citizens under the 15% rule.

      The downside is they will have to re-qualify including 4-point inspection if the home is over 30 years old.

      • September 4, 2013 at 1:33 pm
        Hillsborough Agent says:
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        And Citizens new business rates are a lot higher. It really is a horrible system for the consumer.

        • September 4, 2013 at 2:41 pm
          Mr. Solvent says:
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          ?

          Nope, Citizens new business and renewal rates are the same.

          • September 4, 2013 at 3:20 pm
            jay neal says:
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            The Senate version of the Citizens bill (SB 1770)last session had a new business rate provision. It was blocked by the House. The rates for new business are the same for now.

          • September 4, 2013 at 3:55 pm
            Hillsborough Agent says:
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            Have you tried requoting a CIT policy lately? Pick one of your customers that has been with Citizens for a few years and run a new quote apples to apples. It won’t be the same.

  • September 4, 2013 at 11:56 am
    St Petersburg Agent says:
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    That’s really funny how Citizens officials point out that the take out companies haven’t gone insolvent in the past three years. Do they think 3 years a long time?

  • September 4, 2013 at 7:08 pm
    Maria says:
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    I take it no one has read the Citizens IE #017-13: Personal Lines Policies: New Agent of Record Change Procedures. OMG hold on to your pants

    • September 10, 2013 at 1:24 am
      Mark says:
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      Maria, I don’t see how the AOR process is a bad thing. A customer should not have to submit a whole new application to get a new agent. What’s wrong with it? It’s the same as the private market…

  • September 6, 2013 at 2:22 pm
    Jack Allen says:
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    You guys should compare your rates to the SC Wind Pool. I bet SC’s rates are 60-100% higher based on location.

    • September 9, 2013 at 11:42 am
      FLagent.insured says:
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      No they are not. I write insurance for the whole country and you’ve seen nothing like Florida’s rates.

  • September 9, 2013 at 11:41 am
    FLagent.insured says:
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    This is nothing but the same ole, same ole thats been going on for years. My insurance was sold to TowerHill, when I called them to ask if they would be selling my policy 3 years down the road causing me to go back to Citizens at a much higher rate they told me there are no guarantees. An AMBest rating is much better than a Demotech which means nothing. Some Best rated companies may have been downgraded after the worst hurricane season but they didnt go out of business totally. Demotech rated carriers did.

  • September 10, 2013 at 10:15 am
    jake peters says:
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    For all the talk of Andrew, AIR, RMS and EqeCat say it was a 1:30 storm.

    As to FLagent insured, after Andrew, Florida Farm Bureau had to consolidate its affiliate into another subsidiary because the Florida affiliate was broke. that company was rated A- by Best. Similarly, ARI Mutual and several other carriers domiciled outside of Florida went under because they purchased inadequate reinsurance.

    Today ASI and Florida Family have strong ratings from best yet it was Demotech who launched them out of the box nearly 20 years ago.

    In addition, a review of published financial statements proves conclusively that carriers in Florida that are rated by Demotech spend more money on reinsurance than carriers in Florida rated by Best.

    The largest insolvency in the history of Florida is Poe Financial Group and Demotech dropped their rating more than a year prior to Best sticking with a Secure rating.

    As to Weiss, they rate carriers without ever reviewing a carrier’s reinsurance program, catastrophe or otherwise. That is like your doctor giving you a physical over the phone.

    Opinions are great. Facts are better.

    • September 10, 2013 at 1:00 pm
      The Fieldman says:
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      @ jake peters, as for your comment regarding Weiss, I’d more liken it to a Doctor giving you a physical without you telling him what meds you are already taking. Companies are always welcome to supplement the reinsurance data. I’ll stick by Weiss as they are uninfluenced by company $$$$$.

      Farm Bureau had to do the same thing in Mississippi as MS FB was rated A by Best the day before Katrina hit and had to consolidate into Southern FB to prevent insolvency.

  • September 10, 2013 at 12:32 pm
    Ivan del Jesus says:
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    there is an endorsement on some of the take-out companies that I find “troubling”

    On Heritage Insurance is listed as PLATINUM PREFERRED SAVINGS PROGRAM. Hetitage hires their own contractors (vendors) and in the event of a Claim insured MUST go through the Contractors (vendors) hired by Heritage

    If the consumer wants to use his own contractor:

    Reading from the Heritage Pamplet: “If you decide to use a different vendor to conduct the repairs, we will simply pay your contractor the same amount our Platinum vendor would have received.”

    So the Heritage Vendor (or Contractor ) has ultimate authority settling the claim

    The repairs have an “UNPARALLELED THREE YEAR WARRANTY”

    Most Reputable Contractors in South Florida Give you a 10 year warranty on their work specially if they pulled permits for the job.

    People’s Trust Insurance calls this the Preferred Contractor Endorsement PTIC E023 10 11.

    The repairs are not guaranteed or have a warranty from People’s Trust but from Rapid Response Team LLC

    It’s called the vipGOLD program. “Rapid Response Team workmanship guaranteed for 3 years” and they have “Fully stocked warehouses”



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