7 new Citizens Insurance companies approved for 168K policies

Citizens Insurance continues to catch up as it tries to eliminate excess home insurance policies through its “depopulation” efforts, as several new insurance companies in Florida have been approved to underwrite more policies.

Seven orders were signed by Insurance Commissioner Michael Jaworski in the past week, opening up 168,000 civil policies to speculative bids.

Citizens, which has already passed more than 1.4 million policies, has grown too much, too fast, and fears are growing that a major storm in Florida could reduce its ability to pay claims.

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The Florida Office of Insurance Regulation (FLOIR) is using the Citizens Depopulation Program to offer private market coverage to its policyholders through these withdrawal policies to offset the sudden financial burden citizens are taking on due to its explosive growth.

Despite continued growth in the face of new companies accepting nearly 300,000 policies, Citizens President and CEO Tim Serio expects the number of policies to drop to about 1.3 million by the end of the year.

Several major insurance companies such as Farmers Insurance, Progressive Home and AAA have announced rounds of non-renewals and even outright exited Florida in some cases, paving the way for new property and casualty insurance companies to enter the market.

Seven new takeaways from Citizens

FLOIR approved seven new orders for the Citizens depopulation program that will affect 168,000 Citizens policyholders. Here is the list:

  • Edison Insurance for 10,000 policies
  • TypTap Insurance for 25,000 policies
  • Florida Peninsula for 15,000 policies
  • SafePoint Insurance for 16,000 policies
  • Slide insurance for 75,000 policies
  • American traditions for 12,000 policies
  • Orange Insurance Exchange for 15,000 policies

The effective date of the latest round of take-home policies begins on December 15.

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Who is Edison Insurance?

Edison Insurance Company is a Florida-based home insurance company that was founded in 2005. Edison only offers coverage in Florida, which means they really know their coverage area and can offer competitive rates and coverage, according to the company.

Edison has a Financial Strength Rating (FSR) of “A or Outstanding” from Demotech Inc. for its long-term stability. The company does not have an AM Best credit rating.

AM Best is an independent insurance rating agency that provides credit ratings and financial data products to the insurance industry, according to nsure.com. Demotech Inc. specializes in providing ratings and detailed financial analyzes of regional and specialty insurers.

Who is TypTap Insurance?

TypTap Insurance is a newer company founded in 2016 and funded by HCI Group, Inc. HCI Group is engaged in homeowners insurance, information technology, real estate and reinsurance. TypTap Insurance received an FSR of “A or Outstanding” from Demotech.

What is the peninsula of Florida?

Peninsula Florida began underwriting Florida home insurance in April 2005. It sells exclusive property coverage, insuring nearly 150,000 properties throughout the state through a network of 2,500 independent agents. Peninsula Florida has an “A or Outstanding” FSR from Demotech.

Who is SafePoint Insurance?

SafePoint Insurance is a property and casualty insurance company based in Tampa that specializes in the coastal regions of the US

SafePoint works with independent insurance agents to sell its products and holds an “A or Outstanding” FSR from Demotech.

Who is Slide Insurance?

Slide Insurance is a Tampa-based property insurance company that was founded in 2021 by insurance insider Bruce Lucas. Slide uses AI and machine learning to optimize the streamlining and optimization of everything from insurance solutions to user experience. Slide Insurance holds an “A or Outstanding” FSR from Demotech.

Who is American Traditions Insurance Company?

American Traditions Insurance Company is a property and casualty insurer based in Pinellas Park. The company has been writing policies in Florida since 2005. It launched its insurance subsidiary, Modern USA Insurance Company (MUSA), in 2007 before merging with it in 2018, becoming the largest insurer of manufactured homes in industry. American Traditions earned an “A or Outstanding” FSR from Demotech.

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Who is Orange Insurance Exchange?

Orange Insurance Exchange is the newest kid in Florida. The property and casualty insurer was approved to begin writing insurance in the state on Sept. 1, but won’t begin until the 2023 Atlantic hurricane season ends Nov. 30. Orange Insurance Exchange started with a $25 million surplus, according to the Insurance Journal. The firm is in the process of earning FSR.

What is depopulation?

The Citizens Depopulation Program is a requirement of Florida law that offers coverage in the private market to policyholders.

Citizens is a state-backed insurer established in 2002 as a last resort for homeowners who cannot obtain comparable coverage on the private market. The company never intended to provide homeowners with a cheaper coverage option, but skyrocketing prices in the private market have allowed many homeowners to qualify for coverage who otherwise wouldn’t.

The savings Citizens policyholders have found is somewhat of a double-edged sword that could end up costing them more if a costly storm puts the company in a position where it can’t pay all its claims.

If payouts from policyholder claims deplete citizens’ funds, state law requires the company to collect assessments from policyholders and non-policyholders until the shortfall is paid.

These assessments can be significant, according to the Citizens website, which states that policyholders’ assessments can be as high as 45% of their premium due to the Citizens Policy Surcharge, quickly wiping out any savings they may have enjoyed policyholders.

Do Citizens home policies have comparable cover?

Take home policies are required to have coverage similar to what citizens provided in the original policy. In many cases, coverage can be better depending on which company underwrites the policy.

To compare policies, find the declarations page of your most recent policy and compare it to the download policy. Specifically, you’ll want to look at these coverages:

  • Coverage A (In Florida, this is the replacement cost value of your home)
  • Cover B (Other structures not attached to the home, such as a shed)
  • Coverage C (Personal Property)
  • Personal responsibility
  • Hole loss deduction
  • Limited coverage of fungi, wet or dry rot, yeast or bacteria
  • Permitted accidental occupants; allowed in other structures
  • Loss Assessment Coverage
  • Cosmetic or aesthetic flood damage
  • Structures open to air (Not covered by default so this should be double checked)

Flood insurance is not covered by HO3 home insurance policies and is separate so will not be mentioned in the take home letter.

Coverage limits change from year to year even with the same companies, so slight changes may not be a cause for concern. Talk to your insurance agent if you have any questions.

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