Insurance: Citizens, State Farm

Citizens

The largest insurer in Palm Beach County and in Florida is cutting back what it covers.

Citizens Property Insurance Corp., the state-run insurer of last resort, is phasing in changes for its more than 1.4 million customers statewide and 140,000 in Palm Beach County.

Among the changes:

Most porches, decks, carports and outbuildings are no longer covered.

Citizens is no longer insuring properties valued at more than $1 million.

Other restrictions include a $10,000 cap on cosmetic damage to floors that cover less than 5 percent of the total square footage of a home.

Citizens customers can expect annual rate increases up to the 10 percent annual cap allowed by legislators, and maybe other increases in their bills.

The company’s board has considered a plan to uncap rates for new customers, though that’s under further study after warnings from state officials the move was not what lawmakers intended.

Citizens also is paying reinspectors to visit more than 200,000 homes this year to see if they still qualify for discounts for storm-resistant features. If reinspectors show up, the odds are far higher they will raise rather than lower bills. Bills went up an average of 22 percent for nearly two out of three homeowners visited through March.

In some cases, private insurers are also reviewing the discounts along with another way to hike bills: higher replacement values.

After consumer protests that results from one software vendor were unfairly raising bills, Citizens announced it would accept certain alternative replacement valuations. See your agent for details and appeals options.

— Charles Elmore

State Farm

State Farm negotiated a deal in December 2009 that will keep it in the state, but allows the company to drop some clients in high-risk areas such as South Florida.

The plan also allows State Farm — the state’s largest private insurer — to hike its rates by an average of 14.8 percent, although some customers will see larger increases.

About 125,000 households will be dropped by State Farm, which began sending out notifications to those customers in February. Cancellations will start in August, when the rate increases take effect.

The agreement also allows its agents to write policies for other insurance carriers.

It’s likely the state-run Citizens Property Insurance Corp. will have to pick up some policies.

State Farm had said it would pull out of Florida completely, leaving 806,000 residents looking for new insurance, after the Office of Insurance Regulation denied a 47 percent rate rise in 2008.

For more help:

  • Rates: www.shopandcomparerates.com
  • Florida Market Assistance Plan: www.fmap.org

    Source: Office of Insurance Regulation