The number of customers of the state’s Citizens Property Insurance Corp. dropped this month after private carriers took nearly 100,000 policies.
Citizens had 1.325 million policies as of Friday, down from 1.412 million policies two weeks earlier, according to Citizens data.
The drop came as five private insurers assumed 99,773 Citizens policies in mid-October as part of a state effort, known as “depopulation,” to shift homeowners into the private market. It also came after three years of explosive growth at Citizens, as private insurers shed customers and raised rates because of financial troubles.
State Insurance Commissioner Michael Yaworsky last week told lawmakers that private insurers taking Citizens policies is not “the end-all, be-all” of having a healthy insurance market. But he also indicated it is encouraging.
“I think the biggest takeaway from this is that we’re seeing that private interest come into the state,” Yaworsky told the House Insurance & Banking Subcommittee. “We’re seeing companies have begun to recapitalize and are writing in both an organic way through their producers (agents), and we’re also seeing this legislative mechanism of a bulk takeout of risk from public entity to private entity taking place. It’s generally a good sign of where the market is going.”
Under the state’s depopulation program, private insurers can seek approval from regulators to offer coverage to Citizens customers. The five companies that assumed policies this month received approval in July to assume as many as 184,000 policies — before ending up with 99,773.
Those carriers are Slide Insurance Co., which assumed 46,694 policies; Safepoint Insurance Co., 24,110 policies; Florida Peninsula Insurance Co., 18,594 policies; Southern Oak Insurance Co., 5,346 policies; and Monarch National Insurance Co., 5,029 policies, according to Citizens data.
Regulators also have approved a series of proposals by private insurers to take out additional policies in November and December.
Many state leaders have long sought to move customers out of Citizens into the private market, at least in part because of the risk that policyholders across the state — including people who do not have Citizens policies — could be forced to help pay claims after a major hurricane or multiple hurricanes.
But officials say Citizens, which was created as an insurer of last resort, often charges lower premiums than private insurers, reducing the incentive for customers to leave Citizens.
Trying to help spur depopulation, lawmakers in December approved a change that required Citizens customers to accept offers of coverage from private insurers if the offers are within 20 percent of the cost of Citizens premiums. For example, if a homeowner received an offer of coverage from a private insurer that is 19 percent higher than the Citizens premium, the homeowner would have to accept it.
But data released Tuesday by Citizens indicated many customers targeted by the five companies for October takeouts remained eligible to stay with Citizens, as they received offers that would have exceeded 20 percent rate hikes.
As part of orders issued in late September and early October to allow seven insurers to assume as many as 168,000 policies in December, Yaworsky said they could not seek to raise rates more than 40 percent for policyholders coming from Citizens. Members of the Citizens Board of Governors have expressed concerns about making sure customers targeted by the private companies see the offers and make informed decisions.
“We saw where some companies were making takeout offers to consumers that exceeded 300 to 500 percent of the cost of what they were paying with Citizens,” Yaworsky told the House panel last week, adding that because of what is known as an “opt-out” system, “if the consumer happened to not be noticing that that was going on, they would wind up paying up to 300 percent more for their insurance.”
As illustrations of the explosive growth at Citizens in recent years, Citizens had 511,055 policies on Sept. 30, 2020; 708,919 policies on Sept. 30, 2021; and 1,071,850 policies on Sept. 30, 2022.
–Jim Saunders, News Service of Florida
Pogo says
@State Insurance Commissioner Michael Yaworsky
Hold the phone, slick — you forgot this:
https://www.google.com/search?q=fl+property+owners+going+insurance+naked
And so it blows…
JimboXYZ says
Just more smoke & mirrors in an inflationary economy that’s going to normalize the price gouging of a post pandemic economy.
Ray W. says
My oldest son services a large number of homes in a brand-new subdivision. As I have commented before, his lawn service is fully electric. Many people seek him out for that reason. The lot sizes are on the small side in that subdivision, but many people have significant numbers of planters, trees and other ornamental shrubbery. My son told me months ago that an owner of a different lawn service working in that subdivision came up to him suddenly, yelling that my son was not charging enough money and it was creating pressure on the man’s pricing structure. The man told my son that other mowing companies that worked in that subdivision were trying to set a price point at no lower than $150 per month.
My son was, and is still, charging a bottom price of $110 and up, depending on the amount of curbing, sidewalk footage (corner lots with lots of sidewalk take a lot more time to edge, trim and blow, etc.) and the number of trees that slow down his work, but he has never charged anyone $150 per month, much less more than that. A few days ago, the complaining man came back to my son and asked if my son wanted to buy some of his lawns, as he keeps losing them to my son. My son declined his offer; he is about at his maximum that he can do in four days per week. He keeps one day open to do sprinkler jobs, rock jobs, rebuilding planters, etc.
His girlfriend, who left her old job and now works with him, keeps up with the neighborhood community activities on the Neighbors website. She reports that a number of homeowners have been complaining about the prices charged by other mowers, but no one complains about my son’s prices or work ethic.
This past Monday evening, my son and his girlfriend finished a sprinkler job and a separate rock job, which rock job involved clearing out planters and carrying away the old growth, laying matting to inhibit weed growth, and shoveling 3 1/2 cubic yards of white rock (a relatively expensive type of rock) into a wheelbarrow and spreading it evenly, along with picking up plants chosen by the customer at a nursery and planting them. My son has the software necessary to accurately estimate how much product is needed for any size planter, depending on the depth of the rock or mulch layer chosen by the customer and the dimensions and shape of the planter. He charges a set labor price per cubic yard of rock and lets the customer know exactly how much he pays for the rock and to have the rock delivered to the home, and the prices for any other product that is required for the job, such as the new plants and matting. His customer told him that a neighbor had just paid nearly triple the amount my son charged, and the neighbor had 4 cubic yards of lava rock (the cheapest style of rock) installed without any planting of new plants. My son told me he looked at the neighbor’s planters and thought the work substandard and messy; he said he would never have left the job site if it looked like that one did.
For perhaps as many as 15 years I have breakfasted with a long-term friend on Sundays. He has had the same lawn service for well over 20 years. The owner, in the early years, had a team mowing my friend’s lawn, but the owner was with the team each week. In more recent years, the business had grown, and the owner no longer accompanied that team. Apparently, he was working with another team and had a crew chief lead the original team. My friend told me that in August, the owner began mowing the lawn again, this time alone. My friend talked to him. Apparently, the extreme heat decimated his labor force; they left to get jobs that were less taxing. He can’t find enough people willing to work in heat as high as a heat index of 115, so he is doing the best he can with whomever he can find.
I agree with JimboXYZ that we just might be experiencing a significant increase in instances of price gouging in many subsegments of our economy in this post-pandemic era; people and businesses appear to be gouging customers and blaming it on the pandemic or inflation or any other reason they can find that might help them maximize their profits, contributing in part to a spiraling overall effect on prices. I read an article in the News-Journal months ago which focused on a tomato grower in the Panhandle area who was having trouble finding enough workers to pack the tomatoes in his family-owned packing plant. The owner had to raise his employees’ wages to $30 per hour and up in order to attract enough seasonal packers. What could he do? Let his tomatoes rot in the field?
Curious about the comparative state of our nation’s economy, I decided to check on the strength of the dollar against other currencies around the world. In 2022, the dollar hit all-time highs against almost every other world currency. It has fallen slightly this year but remains among the world’s strongest currencies.
I read a few industry articles, not news sites, on the subject of strong currencies; they attribute it not to an individually strong U.S. economy, but that the U.S. economy, when compared to the rest of the world, is unusually strong. When people who make their living by predicting changes in exchange rates choose to make money by betting on the U.S. economy, it says something about the relative strength of our economy. Again, I am not arguing that our economy is individually strong. The Fed, when it refrained from raising interest rates at its last meeting, downgraded the chance of our entering into recession to approximately 30%, which is significantly lower than the Fed predicted six months ago. Yes, we might still slide into recession, but the proverbial “soft landing” is looking more and more likely.
We still have roughly 1.6 posted job openings per unemployed person (over 9 million posted job openings earlier this month, with somewhat less than 6 million unemployed persons). Economists are generally agreed that we should have between 1.0 and 1.2 job openings per unemployed person, which means that we need some 3 million more workers than are currently available in order to have an economically healthy rate of job openings per unemployed person. If that is true, since America’s birthrate keeps dropping, we need immigrants, and millions of them, simply to bring that small part of our economy back into balance.
But make no mistake. The worst employers who pay the least are going to have the hardest time attracting new employees in such a tight labor economy. Young people are not going to work outdoors in Flagler County in August with a heat index of 115 or higher for hours on end, when they can get a job at Buccee’s that is advertised at starting at $17 an hour in an air-conditioned environment. This is just a fact of life.
I still see help wanted signs on numerous restaurant lawns. I see posters inside many stores advertising sites to visit or numbers to text to seek employment opportunities.
When I was young and working in restaurants in order to pay for my motorcycle racing activities or, later, to pay for college and law school, everyone in the restaurant industry knew who the crappy bosses were, the ones who treated their workers badly and took advantage of them. People talk amongst themselves, and restaurant people hang out together. I don’t imagine it is much different today.
Years ago, there were a number of commenters on this site who were complaining about it being difficult to find workers; they chose to blame it on a certain administration’s policies, not realizing or ignoring the fact that the previous administration had been the one responsible for implementing the original $2.9 trillion in stimulus money that our prior president signed into law. In reality, it was more likely that the complaining commenters were crappy bosses who took advantage of their employees, and their employees left to work for better bosses or better pay or both. There are people who invest in human potential, and everyone benefits. There are others who exploit human potential. No one wins with them.
Laurel says
Ray W.: Ah ha! Don’t you just love ’em? Isn’t it free enterprise? Years ago, I got a job with a city community development department. Part of my job was to put new subdivisions on the city map. I was into it. I enjoyed it, and didn’t look up. One day, the typesetter came to me and told me to cool it because I was making others look bad! Wha…? Well, the same woman later told me I was selfish because I chose not to have children. Again, wha…?
Before that, I worked at a very, very busy Crown Liquors as a bartender. The drinks were 50 cents per one once shots. Can you imagine? Well, one time, the owner decided to lower the cost to 40 cents per shot. Man, were we pissed! That was until we found out that we made more money in tips!
Free enterprise, right? Your son should keep track of dates and times and comments by these others, just in case. Data goes a long ways. As a lawyer, you know that. I’m assuming he knows enough to not hurt himself by charging too much less than others, and still making a healthy profit. The other company has no business telling him how to run his.
TR says
I’ll have to check into this being my HOI just went up. I wish the state would stop all this insurance scams to get people to put in claims when they don’t need to.
DAve says
Here’s my take. Just let one major hurricane come shore and impacts those folks that were forced to move from Citizens and when these 5 insurance companies pay out, they will be long gone. What our state govt and our loser of a Gov have yet to do is put a muzzle on the insurances companies and these scams to replace roofs that do not need to be replaced.
TR says
Now the insurance scam is hot water heaters as well as roofs. My elderly neighbor got scammed with both within the last year.
endless dark money says
got to love the coporate shell game, they are making profits hand over fist. Yeah you can no longer afford your house but the shareholders are doing great and thats what matters. Wait for the next big storm and they will be out again. Probably why repubs deny 8 billion people affect the ecosystem cause that would result in less profits.
Alexander says
How come the people of Florida never hear from DeSantis what he is doing about the high cost of homeowners insurance in Florida? Maybe there is a reason that he never talks about that and it would be nice if he has time when he isn’t boosting hmself in Iowa to address that issue.
Just because someone is running for another office doesn’t mean their obligation to his current position take a back seat.
He sure is failing the State of Florida.