Some Florida Keys homeowners may find their property insurance carriers changed unless they take action to prevent it by mid-November.


Recent mailings from Homeowners Choice Property and Casualty Insurance Co. and possibly other authorized “take-out companies” were sent to specified homeowners to advise that they will assume windstorm or other “peril” policies from the state-run Citizens Property Insurance Corp.

Owners who prefer to remain with Citizens must file an opt-out form by Nov. 15, a Homeowners Choice mailing says. Otherwise, the policy will be automatically transferred to the new insurer.

“These take-outs are part of ongoing depopulation efforts to reduce the number of policies in state-created Citizens and transfer them back into the private insurance market,” says the Florida Office of Insurance Regulation.

Mel Montagne, a Key Largo insurance agent who is president of the Fair Insurance Rates in Monroe consumer group, said owners must decide for themselves whether to go with the take-out company or stay with Citizens.

“About eight or 10 companies are active in depopulating windstorm policies” in the Keys, Montagne said Thursday. “The best thing is to talk to your local agent.”

Private companies may offer lower rates or be able to provide a higher limit of coverage than state-run Citizens, he said. “But when I talk to people, I remind them that sometimes it’s better to stay with the devil you know.”

A Homeowners Choice letter provided to the Keynoter by a Citizens policy holder indicates the firm, a Tampa company founded in 2007, offers an estimated policy premium about 25 percent lower than the Citizens’ estimate of around $3,900., an insurance-rating firm, gives Homeowners an “A” rating for financial stability.

Citizens currently writes 18,467 property policies in Monroe County, with an average annual premium of $3,179. That average is expected to increase by 9.1 percent to $3,468.

Citizens Property has a legal cap on its annual rate increases, which private companies do not. Owners who transfer to a private company cannot change back to Citizens unless their policy premiums rise to 15 percent above the Citizens average.

The take-out companies can select which properties they are willing to insure, and have some catastrophic-event backup from the state if a major hurricane should strike.

“Every one of the companies has a different criteria” for deciding which homes or businesses they are willing to insure, Montagne said.

About two dozen businesses statewide have been certified by the state insurance office to serve as take-out companies. This year, Homeowners Choice received approval to take over 27,000 policies statewide, unless the homeowners file to stay with Citizens.

Messages left with Homeowners Choice and Citizens seeking information on the number of the Monroe County policies sought or written by Homeowners Choice were not returned at press time.

Citizens Property was created in 2002 as an insurer of last resort when many Florida homeowners, especially in coastal areas like Monroe County susceptible to hurricanes, found they could not find a private company willing to provide windstorm insurance at a reasonable cost, or at all. Virtually all home mortgages require the property owner to maintain full insurance coverage.

The nonprofit Citizens organization celebrated in July when it declared it had reduced the number of statewide Citizens policies from a high of nearly 1.5 million in 2012 to fewer than 500,000 through transferring them to private companies.

Citizens currently writes the majority of windstorm policies for Monroe County residences and covers 33 percent of the Monroe property-insurance market — its highest percentage of any Florida county.

Citizens policy holders also are cautioned by the company that they could be hit with up to a 45 percent surcharge on their premiums should Florida be struck by a disastrous hurricane.

After a decade without widespread storm damage, Montagne said, the state has banked about $17 billion in cash and bonds for its catastrophe funds so the chances of an emergency surcharge would appear to be significantly reduced. Earlier this year, a State Board of Administration executive declared the catastrophe fund was “in the strongest financial position we’ve ever been in.”

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