Homeowers, beware of Citizens’ new ‘Insurance Depopulation Plan’

If you are one of the thousands of South Florida homeowners insured by the state-run Citizens Insurance program, you may have received a letter from them recently, or from another insurance company that you’ve probably never heard of. It is all part of a recent effort by Florida Gov. Rick Scott and the Florida Legislature to “shrink” Citizens Insurance and move policyholders to private companies.

However if you threw the letters out, you will automatically be “depopulated” to a company you may know nothing about, even if you haven’t given your approval. It’s called a “Negative Option” plan and, according to a member of the group’s board of directors, it’s intentionally aimed at ousting as many policyholders as possible off Citizens’ roster.

To date, 84,000 policies already have been “taken out” and it’s believed that as many as 210,000 more — mainly based in High Risk Coastal Areas of South Florida — have been earmarked for removal.

The goal is reduce Citizens’ exposure and allow private companies to take over more “risk” in the event of a bad storm, but critics argue that the way the program is being enacted does not give homeowners enough information about the new companies, nor does it boost their ability to pay claims in the event of any major storm losses.

To make the situation even more precarious, there’s a 30-day countdown for this recent group of homeowners “selected” for depopulation that expires on Nov. 6.

In simple language, that means if you do nothing and fail to send back the proper “Opt Out Forms” to “Say No,” you automatically will be removed from Citizens Insurance and your homeowners’ insurance coverage will be taken over by a new company.

Unfortunately, Citizens Insurance offers very little about the plan on its website. As a result, many homeowners may be frustrated with the lack of information on “Just Saying No.” However, CBS4 has investigated the situation which may help you decide for yourself whether you want to accept the new coverage, or to opt out and stay with your current Citizens policy.

Still, some customers like Doral’s Waldo Faura say its new plan is optional; customers can just say no…but he says that Citizens isn’t telling its customers all the details.

“Absolutely not,” Faura added. “I think Citizens has been on the path to push insurance policies for the insurance companies at the expense of the insured, and this is another means and another way of doing it.”

If you get a letter from a private company that wants to take over your Citizens’ coverage, you may want to check out its website for more information. I crunched the numbers and found that the plan targets approximately 200,000 policies through an automatic negative option aimed at increasing private insurance coverage.

To decline the offer from a private insurer, you have to file a formal opt-out form within 30 days. If you received one of these letters from the state’s Citizens Insurance program, you must formally notify them by Nov. 6 and let them know you want to stay in the program and not be “taken over” by another company.

Citizens has a special hotline set up to handle questions at 1-888-685-1555. You also can get more information from your local insurance agent.

For more details on the latest “Insurance Depopulation Plan” and how it may affect your insurance coverage, go to: www.citizensfla.com/about/depopinfo.cfm

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3 Comments on "Homeowers, beware of Citizens’ new ‘Insurance Depopulation Plan’"

  1. What is the impact to people who have transfered? Has it been LOWER Premiums? That would be a good thing to know.

  2. Vivian Robaldo | January 13, 2014 at 12:51 pm | Reply

    when I tried to obtain a new quote from the company they wanted me to change to, my insurance would have gone up almost $1,000.00 year!!

  3. Freddy Scott | June 24, 2014 at 3:51 pm | Reply

    They, Citizens are also reducing the Actual cost Value to replace a property on existing Policies , dramatically by over a third . again not disclosing how much they will pay in Premium for this reduced coverage .

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