Florida - Wednesday September 27, 2023: CEO Tim Cerio told the Citizen’s Board of Governors Wednesday that the ongoing depopulation program, and the double-digit rate hike will put the state’s insurer of last resort on the road to recovery.
More than 300,000 Citizens policyholders are getting letters of removal effective October 10th that offers them the chance to select a private insurer who has agreed to take on the homeowner’s risk, at a higher premium. It’s Citizen’s Legislative mandated ‘depopulation program’ aimed at moving some policy holders off the bloated state backed insurer’s roles.
Citizens CEO Tim Cerio told the Board Wednesday that the letters include a private company’s “estimated renewal premium” that is no more than 20% higher than Citizens’ premium. Essentially, the homeowners being depopulated will have to pay up to 20% more in premium costs.
"What that means is that if you receive an offer that’s within the (20%) range you are no longer eligible to stay with Citizens," said Cerio. "If it is 20% or above, you may stay, but you have to opt in.”
If you receive a removal letter and take no action, you’re Citizen’s coverage will automatically be dropped.
Coupled with the removal notice, is the recently approved rate increase for the remaining Citizen’s policy holders that amounts to 11.5% for most homeowners.
“Nobody wants to pay higher insurance rates," said Cerio, "but we are actuarially un-sound and we do have a mandate from the Legislature and that’s why we have sought the maximum rate increases we think are justifiable under the law.”
Without an increase, Cerio warned Citizens may not have enough to pay all the claims resulting from a catastrophic storm resulting in a statewide assessment. "We must do everything we can to minimize the risk of being hit with an emergency assessment," he said.
An emergency assessment would require all private insurance holders in the state, home and even auto insurance holders, to make up for Citizen’s loses.