"For me, it all came down to saving money. Being unemployed for
six months, I had to cut down on expenses. The quotes I received
helped me lower my costs and put more money in my pocket."
If you live in Florida, you've probably heard of Citizens Property Insurance Corporation, or Citizens Insurance. It is the largest insurer in the state of Florida with over 1.3 million policies on homes, condos, and apartments.
Citizens Insurance is Government-owned
Citizens is unlike any other insurer in the state of Florida. Most insurance companies are private organizations run independent of government intervention and privately managed. Allstate, State Farm, Farmers, and hundreds of others are all private companies that do their own underwriting, risk analysis, and claims coverage.
Citizens Insurance, on the other hand, is owned by the state of Florida. It was created in 2002 to provide property insurance for home owners who could not obtain insurance elsewhere.
Citizens Property Insurance is the 'Insurer of Last Resort'
Private companies are in the business of making money, not losing it. Florida has been plagued in recent decades with an onslaught of bad weather that has made private companies wary of insuring property in Florida. As a result, insurance in Florida can be very difficult to find.
The state of Florida started Citizens as an 'insurer of last resort'. The most common private insurance companies were not offering insurance in many areas of Florida at that time. Therefore there were many home owners who could not find insurance from private companies.
Issues with Citizens Insurance
Consumers have had mixed reviews when dealing with a government-run insurance company. While some consumers have had a good experience, many express concerns and complaints with the organization. The most common complaints against Citizens Insurance are:
DMV-like service. If you've ever been to the DMV, you know what this means. The DMV is notorious for long lines and representatives who couldn't care less about providing fast, efficient service for the never-ending line of customers. Citizens insurance is a non-profit, government-run organization. Customer service has never really been the government's strong suit. Many consumers have confirmed that this is no different in the insurance industry.
- High rates & rising rates. An insurer whose
goal is to be the 'insurer of last resort' is most
likely never going to be the most cost-effective
option for insurance. Citizens insurance is often
pricey. However, many consumers have a hard time
finding other insurance carriers willing to write
insurance on their home, and thus have to live with
Additionally, the state of Florida has recently decided that 1.3 million policies is too many for the state-run enterprise. As a result the state has been steadily raising premiums every year on home insurance policies in an effort to reduce the number of policies in its portfolio. Many consumers have reported ridiculously high increases in premium upon renewal of the policy.
- Under-capitalized. Another concern that
many consumers have is an ongoing worry that Citizens
Insurance is not in a financial position to pay out on
claims if disaster strikes. There have been numerous
reports in the last couple of years that Citizens has
over-extended itself, and does not hold the cash
This under-capitalization may be another reason why many consumers are seeing large increases in premiums upon renewal. Higher premiums lead to greater revenues on renewing policies, as well as some consumers looking for insurance elsewhere.
- Less desirable coverage. The final complaint that many consumers have is that Citizens Insurance options are becoming less and less desirable. In addition to rising rates, many are seeing deductibles increase and the number of perils covered decrease. This equates to paying more money for substantially worse coverage.
Alternatives to Citizens Property Insurance Corporation
The reason Citizens Insurance exists is because consumers were having a difficult time finding appropriate insurance. Although the climate for insurance in Florida still isn't perfect, there are companies that are popping up that are willing to insure homes throughout the state.
If you are looking for an alternative to your state-owned Citizens insurance policy, fill out our online form to get quotes from private insurance companies in your area. Due to the volatility of the insurance market in Florida, it's hard to say whether or not you'll be able to find great insurance alternatives. If our free service doesn't yield any results for you now, don't worry. Wait 6 months and try it again. Great companies are always re-assessing risk and throwing their hat in the ring. The key as a consumer is to stay on top of it, and to be ready when the opportunities come!