So, maybe you have received a letter from Citizens notifying you that another company will be offering you a property policy that will replace your current Citizens wind only or multi-peril policy and that familiar Clash song from the 80's came to mind as you read through the initial letter and the subsequent letter from the "take out" carrier about the process. You think to yourself , "take out", now I am picking up Chinese and humming an old 80's song? Hold that thought and let's look at what is really going on here. Citizens has been trying to depopulate for quite sometime due to the large exposure the pool has amassed since Hurricane Andrew. Attracting private insurers to the provide coverage in wind prone areas has long been the goal and 2014, 2015 and 2016 have seen large numbers of policies removed by the private market. Carriers participating in this process must be approved by the Department of Insurance and meet financial condition requirements. In addition, the approved "take out" carriers are stress tested given certain "what if" scenarios as a result of assumed storm damage. The policies that are being offered are supposed to be very similar in coverage and price to the Citizens policy that is being replaced but sometimes have enhanced coverage options and premiums can be lower. A compelling reason to make the switch away from your Citizens policy is the fact that Tier 1 Citizens assessments (up to 45% of your premium should Citizens have losses that chew up reserves) will no longer apply. In addition, these carriers may not be on the same "glide path to rate adequacy" as Citizens which we have seen as multiple year premium increases with the latest slated to be 8.9%. And, finally, supporting the private market and extending more choices for consumers is usually a good thing and should lead to a stronger property insurance market. So if you receive one of these notifications, you could check out www.citizensfla.com where you will find a depopulation corner with links to the Office of Insurance Regulation site where you can find financial information on the carrier offering to take you out of Citizens and other useful information to help you decide, Should I Stay or Should I Go.

Welcome to the Florida Keys Insurance Blog! We thought the best place to start the conversation on our new insurance blog was at the beginning…

The first methods of transferring risk date back to the third century BC as Chinese and Babylonian Traders spread their cargo across several of their vessels, akin to not keeping all your eggs in one basket. Mediterranean traders employed a strategy of shifting some risk to a “lender” in return for an additional cost (premium) should any of their cargo suffer a specific loss or peril. Greek merchants from Rhodes developed the concept of “General Average” where a number of merchants paid a premium against loss while shipping their goods together. The idea of spread of risk, the concept of transfer of risk, and indemnification to financially compromised parties as a result of a loss or specific types of loss became the basic tenants for the concept of insurance as we know it today.

Today the varieties and complexity of insurance products has grown to the point where the average consumer is really not prepared to evaluate all inherent risks, understand the coverage, exclusions, or the acronyms we use, for that matter, that appear to guarantee agents some job security. Direct writers such as Geico, Progessive and others have attempted to sell certaintypes of coverage to consumers via the internet, placing the consumer in a position much like a doctor performing surgery on their own ailment.

But fear not, the goal of this Florida Keys insurance blog and the insurance geeks behind it, is to provide consumers with a resource to be able wade through the insurance speak, educate consumers to the exposures they have and possible strategies to deal with them, give you, the consumer, not quite the ability to perform “insurance surgery” on yourself but be able to understand your condition and the optional remedies different policies may provide. We will probably be jumping up and down on the soap box from time to time about the latest wind and flood issues, pointing out important coverage pitfalls in policies, and discussing areas of policies that are misunderstood or generally unknown by the consumer, and when appropriate, hope to do this in a sensible manor with humorous undertones when possible. At the very least, we will provide literature for insomniacs.

So, get ready to break out those policies, and follow along because the nerds of the insurance world are here to let you know what those papers say that you just filed away in the drawer for another year. Don’t be afraid, you can read them now, before the loss. It doesn’t hurt to know what you have or what you have not been paying for.

Welcome!

Joe Roth
Vice President, Regan Insurance