ROYAL PALM BEACH, Fla. — Citizens Insurance policyholders who are receiving letters urging them to transfer to a private insurance company are turning down the offer under certain circumstances.
Lori Lanni of Royal Palm Beach recently received a letter from citizens.
"My first reaction was upset because I thought I was going to have to pay the higher premium, which is $2,000 more than I expected," Lanni said.
Under state rules, Lanni can and did refuse the higher offer, based on what she's paying for Citizens Insurance and the offer to change insurers.
Mark Friedlander with the Insurance Information Institute said, under state rules, explained why that action is within her rights.
"According to state regulations, if the offer is within 20% of what you currently paying for Citizens, you must accept the private policy offer," Friedlander said. "Our understanding is many Citizens customers who have gotten takeout offers have gotten them well above the 20% threshold."
In Lanni's case, the $6,200 offer was more than 20%.
Citizen Insurance is currently approaching 1.4 million policies in Florida and is using the depopulation program to reduce its exposure by having new companies come in and take over policies.
"[I'm] really not surprised here because according to our analysis at the institute, the average difference between a citizens policy and a private market policy is running at least 40%," Friedlander said.
Citizens is also looking for a rate hike, which for the average home would be about 11.5% beginning in mid-December.
Sticking with Citizens, for now, is something Lanni is willing to do as she shops for new coverage.
"I'm not going to pay $2,000 more," Lanni said. "I don't know why you would."