Well, sometimes ‘opt out’ means ‘maybe later’ p3

Mon Feb 1st, 2016 on     Homeowners Insurance,    

We are picking up where we left off in our Jan. 20 post. The subject is the depopulation process that Citizens Property Insurance Corp. has been undergoing for the last couple of years. This is one of those things that looks reasonable on paper, or sounds like a good idea at the time, but that definitely has some glitches. Unfortunately, the glitches are at the expense of policyholders — and some of those policyholders are more vulnerable seniors.

What is happening is this: Citizens has notified these people that they could switch their property insurance to a private insurer for about the same premiums. This is the “encouragement letter.” The next letter they receive is the “takeout offer,” a letter from the take-out company that has the option to pick up their policy. This is where the process breaks down.

Citizens and private insurers claim that this second letter clearly indicates that they must opt out of the new coverage if they want to remain with Citizens. Policyholders, however, have been surprised to receive the third piece of correspondence in the process: the letter that confirms that their coverage has been picked up by the private insurer. Policyholders feel blindsided, and they must go through a good deal of red tape to transfer their coverage back to Citizens.

Citizens’ claim that the opt-out message is clearly stated in its correspondence may be a little disingenuous. According to the sample letter on the Citizens website, the “encouragement letter” puts the burden of explaining those next steps on the private insurer:

Other than continuing to pay your Citizens premium, no action is needed to accept insurance coverage with [private insurer]. [Private insurer] will send you any additional notices and documents necessary to complete this transaction. Information on how you can decline this offer will be included in the offer from [Private insurer] and is available at www.citizensfla.com or by contacting your agent.

Does the private insurer pick up the ball? We’ll discuss their approach in our next post.


Miami Herald, “Citizens policyholders face multiple ‘opt out’ notices,” Leila Miller, Jan. 9, 2016

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