At a lovely 72 degrees and partly cloudy, the weather in Lee County seems far from stormy. For the past decade Florida has avoided a serious hurricane damage, but home insurance costs are still on average the highest in the nation.
As most Florida homeowners know, Citizens Property Insurance Corporation was founded in 2002 “to provide both windstorm coverage and general property insurance for home-owners who could not obtain insurance elsewhere,” according to Wikipedia. As a trustworthy and affordable source of insurance, it soon became the largest insurer in the state.
Florida Realtors reports that this lead in the market is changing rapidly, “Passing a big historic milestone, the state-run insurer downsized below 500,000 policies in January. It’s the smallest Citizens has been since its 2002 founding.” This drop in Citizens policy holders is a direct result of the “Depopulation” program in which Florida law expects Citizens to return policy holders to the private market in order to share the burden of risk.
According to Citizens Property Insurance Corporation, “The Depopulation program works with private-market insurance companies interested in offering coverage to Citizens policyholders. Participating companies must be approved by the OIR. Approved takeout companies can offer to take over your Citizens policy at any time during your policy period.” When private insurance companies select a policy to “takeout,” the policyholder will be notified and given 30 days to opt out of the new insurance coverage. If no action is taken, the takeout offer will be accepted.
Below is a graph issued by Citizens to illustrate the percentage of policies involved.
This program has received positive review for diversifying the market and encouraging private-market competition. Additionally, many of the new insurance options are being offered by Florida-based companies. Florida realtors reports, “Smaller Florida-based companies, many whose years of existence can be counted on one hand, are driving nearly all the growth.” This is a positive sign for growth in the Florida economy and positive results of the State’s efforts to move consumers back to the private sector.
Through the Florida Office of Insurance Regulation, homeowners can search for approved home insurance options. In Lee County, 27 options were found for a new construction of $300,000 value. These rates ranged from $1,883 to $3,882 with Citizens landing at eighth in the list with an offered rate of $2,351.
Amid the positive review, there is also a concern that these new insurance companies are unprepared to cover a natural disaster. According to Florida realtors, “A group representing big insurance companies warned of ‘troubling questions about the financial strength’ of small Florida-based firms taking Citizens customers in record numbers.” Consumers are always encouraged to review the policies and practices of any insurance company before purchasing a home insurance policy.
As the market changes rapidly, it is a good time to survey your options for homeowner’s insurance and make the choice that makes the most sense for you and your family. With more options, citizens of Florida can expect private-market competition and lower rates in the years ahead.
If you’re interested in Sanibel real estate–whether you’re buying, selling, or just looking–contact one of our knowledgable Sanibel realtors, search our MLS for available properties, or get in touch with our office at 239-272-2411 for general inquiries. We’re also more than happy to help you find the Sanibel realtor that’s the right fit for you.
Sources: FloridaRealtors, Florida Office of Insurance Regulation, Citizens Property Insurance Corporation, and Wikipedia
This article is provided by John R Wood Properties, a full service Sanibel Island real estate agency made of people who love where they live as much as what they do. With local knowledge and decades of combined experience, our Sanibel and Captiva Island realtors are passionate and dedicated to exceeding your real estate needs.
About the author: Michael Rogers is a lifelong writer who joined the John R Wood Properties team in 2015 as a Communications Content Manager. He enjoys running and biking on Sanibel, donuts from Bennett's, and keeping people updated with the latest in local news and Sanibel real estate.