Desperate to shrink its dangerously overexposed state-run insurer, Florida is floating legislation to allow eligible surplus-lines insurers to take policies from Citizens Property Insurance Corp., the state’s ostensible last-resort underwriter.
Homeowners must first look to the private market and can only go to Citizens if rates found in the private, or admitted, market are 15 percent higher.
Meeting that rate-differential threshold became much easier when, after an outcry from consumers, state mandates froze the last-resort insurer’s rates—allowing more residents to tap coverage and to get cheaper premiums than those found in the private market. Citizens’ policy count has ballooned since then.
Shaw isn’t comfortable with the fact that surplus carriers are not covered by FIGA, and he doesn’t trust the freedom of rate and form they enjoy.
“Upon renewal, rates are going up—and no one has any say about it,” he says.