The Worst Coverage in the Marketplace
Citizens Property Insurance Corporation president Barry Gilway recently commented that Citizens has the worst coverage in the marketplace, but it is not deterring about 8000 Floridians a week from obtaining coverage with the residual market. Gilway and Citizens are working toward a better method of allowing interested companies to write policies before they enter Citizens in an effort to stem the tide of new business.
Gilway believes many consumers are not paying enough attention to the potential for large assessments following a storm. They tend to focus ontheir premiums in the short run but could be better off with a private market insurer that does not have the same high assessment potential.
“I think there is a way … to come up with an overall concept and approach that basically makes sure that every single policy gets shopped to every interested company before it enters the system,” Gilway said.
The Office of Insurance Regulation approved private insurers to assume as many as 310,000 policies in November and December of this year, and recently announced it has authorized companies to assume about 65,000 more policies in January 2013. Although the number of policies actually removed from Citizens will be somewhat less, this represents a resurgence of interest in assumption activity. Even so, policymakers need to address Citizens’ subsdized rate levels in relation to those of the admitted market because at the rate of 8000 new policies a week, Citizens will have a hard time making meaningful reductions to its policy count through assumptions alone.