Another round of “take-outs” is coming for Citizens Property Insurance Corp. The state-backed insurance company has made some progress in its struggle to move policyholders to private insurers, paring down its rolls from a 2012 high of 1.4 million policyholders to today’s 933, 422. Still, there is a ways to go: Even with the take-outs scheduled to be completed by fall, Citizens will be far from its goal of 650,000-700,000 policyholders.
The term “take-out” can be a little confusing for non-insurance types. Generally, the term is used in reference to obtaining insurance: A new car owner “takes out” an insurance policy. With the Citizens initiative, it is not the consumers who are taking out policies. Rather, it is other, private insurers in Florida who are choosing Citizens policies to take over.
Essentially, Citizens has granted four private insurers permission to take a combined total of 100,000 policies from Citizens. The policyholders have no idea that they are with a new carrier until the new carrier contacts them by mail. Policyholders are apparently ignoring the letters from their new insurers, mistaking them for junk mail; they have no idea what has happened.
Even policyholders who open the letters are confused, though. It seems no one has explained to them why they would have a new carrier. In some cases, the letters did not include information about the new rates, either. While policyholders can opt out and remain with Citizens, they must complete the form that is included with the letter from the new insurance company to do so. And yet, if they don’t read the letter, they won’t know about the form.
Policyholders have other concerns as well. We’ll get into those in our next post.
Source: Insurance News Net, “Thousands Of Citizens Customers Could Be Switched,” Donna Gehrke-White (Sun Sentinel), Aug. 11, 2014Share