Citizens has new mission: compete
The insurer cuts rates and is allowed to fight private companies for more business.
By TOM ZUCCO
Published March 27, 2007
Monday was a pretty good day for Citizens Property Insurance: The state-backed insurer was the first company to have its rate-reduction plan approved, and it won final approval from the Legislature for a business plan that lets it sell multiperil policies on the coast in competition with private companies.
Citizens' rate cuts, which are mandated of all property insurers, range from an average of 2.9 to 6.7 percent for basic homeowner, rental and condo policies, to 12 to 14 percent for policyholders in high-risk, or coastal, areas.
The reductions begin June 1 and continue as policies are renewed. For policyholders who have already paid their premiums this year, refund checks will start arriving April 15.
State regulators earlier this month said the average statewide reduction would be about 24 percent, based on presumed savings that allow companies to buy more backup insurance, or reinsurance, from the state. But nearly all major insurers filed for far lower reductions.
Created as the state's insurance company of last resort and now the largest property insurer in Florida with more than 1.3-million policies, Citizens stands to grow even larger since lawmakers ruled it no longer has to have the highest rates in the state and can sell multiperil policies in high-risk areas.
Citizens' plan to do that already had the blessings of Gov. Charlie Crist and the Florida Cabinet. On Monday, the final hurdle, approval from the Joint Legislative Budget Commission, was unanimous.
Tom Zucco can be reached at email@example.com or (727) 893-8247.