In Saturday's (13 October 2012) St. Petersburg Times there is a headline plastered on Page 1-A, the front page: Opt out or stay? Get the facts.
It's a Question and Answer column on if you want to stay with Citizens - the State of Florida's homeowners insurer of last resort - or go with the takeout company that Citizens is assigning you to. This Q and A was written by none other than Jeff Harrington, the St. Petersburg Times' purveyor of anxiety and fear when it comes to articles on the economy. (With one minor exception: The recent sale of The Tampa Tribune and TBO.com to Los Angeles-based Revolution Capital, a private equity firm).
Did I mention Jeff Harrington? Remember during the height of the credit crunch the St. Petersburg Times was nothing but lots of articles about how impossible it was to get a non-mortgage loan? All written to instill fear and anxiety in the general public?
If you haven't read my topic on Surviving the Housing Crisis, please by all means feel free to do so. After all, the news media such as the St. Petersburg Times - as well as other media outlets such as Bay News 9 - should not be drowning you in fear as far as your mortgage, your home's value or the ability to get homeowners insurance is concerned.
OK. I took a look at that article with interest. After looking at that article it's got some helpful hints, but unfortunately the element of fear is contained. First, let me give you a backgrounder on why Citizens came about in the first place.
Let's trace back to 2004, and Florida's golden hit parade of hurricanes - Charley, Frances, Ivan and Jeanne - plus the Florida platinum hit parade of hurricanes such as Katrina, Rita and Wilma in 2005. Insurers were being hit big time with losses that came about from claims from homeowners for damage as a result of these hurricanes which we will know and remember for the forseeable future.
What did insurers have to do? Stop writing homeowners policies in Florida and pull the homeowners insurance business out of the state. With insurers cancelling or non-renewing policies at a alarmingly fast rate, the State of Florida stepped in and created a homeowners insurance company which would be dubbed the insurer of last resort: Citizens Property Insurance Corporation, or simply called Citizens as we know today.
Several years have passed since the hurricanes of 2004 and 2005. Citizens was writing the majority of homeowner policies for homeowners in Florida who are unable to get homeowners insurance through traditional means. Then the State of Florida was enticing insurance companies to take homeowners out of Citizens and have the insurance company take the risk. The process in which an insurance company takes over a homeowner's Citizens policy is what is called a "takeout".
But here's the good news: You are not stuck with Citizens, nor the insurance company that Citizens assigns you to when you get your letter with a request for a response. I have seen more and more insurance companies slowly getting back into the Florida homeowners market.
When you get that letter from Citizens saying that you will be assigned to another insurance company, what you should do is to call your insurance agent before you make that decision. With more and more insurance companies getting back into the Florida homeowners market every year, your choices for homeowners insurance should get better - and hopefully see lower rates. This is true even if your homeowners policy is one or two months away from renewal.
Very important: You only have a limited amount of time to decide whether you want to stay with Citizens or go with the insurance company that Citizens is assigning you to. When you get that letter from Citizens, call your insurance agent right away and have him or her shop around for the best quotes on homeowners insurance. Same thing if you have condominium unit owners insurance - when you get the letter from Citizens, call your insurance agent.
In short, let me say this again: You are not stuck with Citizens, nor the insurance company that Citizens assigns you to when you get your letter with a request for a response. Don't let the St. Petersburg Times drown you, the homeowner or condominium unit owner, in fear.