Why more South Florida property owners may be going with Citizens
Just five years ago, Citizens Property Insurance Corporation, the state-run insurer of “last resort” for those Florida property owners unable to secure coverage on the private market, saw the ranks of policyholders mushroom to 1.5 million.
However, thanks to everything from the ten-year absence of hurricanes to the state’s “depopulation” program that created incentives for private insurers to start taking on more Citizen’s policyholders, this number has since fallen to 450,000.
Interestingly, this five-year trend could be headed for a reversal, as agency projections are forecasting that as many as 50,000 policies — most of them in South Florida — will be added in the coming months and that this number is likely to climb higher.
What’s behind this sudden reversal?
Recent reports indicate that it’s looking increasingly unlikely that state lawmakers will address the issue of assignment of benefits manipulation, marking potentially the fifth straight year that no action has been taken.
Indeed, with less than two weeks to go in the session, a Senate bill that would have prohibited water restoration contractors from collecting legal fees if working under an AOB clause was not brought up for debate by the Banking and Insurance Committee.
Similarly, a House bill calling for a complex formula in this area did advance, but experts believe its prospects of passing appear poor given the looming deadline.
What all this means, say experts, is that homeowners in areas where AOB abuse has been a major problem — namely Palm Beach, Broward and Miami-Dade counties — will likely see insurers deem them too big of a risk and decline to issue them new policies. This, in turn, will force them back to Citizens.
It will be interesting to see what plays out not just in the months ahead, but the days ahead. Indeed, there’s always the possibility of lawmakers passing an AOB-related measure at the eleventh hour.
Stay tuned for updates …
In the meantime, consider speaking with a skilled legal professional if you have questions or concerns related to denied or delayed claims under a homeowners’ insurance policy.
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