Florida residents who have wind-only policies from Citizens Property Insurance Corp. will have to re-apply for coverage as of February 1, 2009, representatives from the state-created carrier said in a press briefing yesterday.

Citizens, the state's insurer of last resort, said it is updating its computer system for wind-only policies and 350,000 policyholders will need to re-apply for coverage as their current policies will not be renewed.

The changes do not affect policyholders who have coverages other than wind-only.

John Kuczwanski, public information manager for Citizens, explained that Citizens was created by joining the Florida Windstorm Underwriting Association with the Residential Joint Underwriting Association. The Windstorm Underwriting Association, he said, ran on an old computer system with "long, difficult to read policy forms."

Mr. Kuczwanski said, "We are updating those policy forms to industry standards, and in doing so, we have to nonrenew the existing policies and have [customers] submit these new applications, because there are choices that the consumer needs to make, and [the choices] will be written on a new computer system which is Internet-based instead of the old manual process on the old AS400 system."

The choices include the option to reduce coverage on detached structures, Mr. Kuczwanski said.

In letters that will be sent to policyholders, Citizens notes that almost all who currently have wind-only policies will qualify for coverage. Additionally, rates will not be increased.

However, Citizens added that policyholders who have a shingle roof that is over 25 years old, or any roof that is over 50 years old, will need to "update his/her roof in order to be eligible for coverage." Mr. Kuczwanski said this new underwriting guideline is "pretty much standard in the industry."

Citizens also said that if a policyholder does not have enough coverage to cover the replacement cost for a home, then additional coverage will be required, which will increase the overall premium.

Mr. Kuczwanski said the new computer system provides a replacement cost estimate that the policy will be written for.

If customers disagree with the estimate, he noted, "they can provide us the declaration page from their fire and theft policy in the private industry, or have an appraisal done. Basically, that's being done to protect our interest and, more so, protect our customers' interests if there is a total loss."

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350,000 Fla. Citizens Policyholders Must Re-Apply for Coverage

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