Citizens working to shed customers

Longboaters might want to take one more look at their mail before they discard it as junk. Their insurance policies could depend on it.

Just ask Longboat Harbour resident Bill Allen, who received a Jan. 16 letter from Citizens Property Insurance Corp. that essentially told him it was switching his policy to another insurance carrier.

The only problem is, Allen didn’t have to switch.

But without the advice of George Ceshker, of Secur-All Insurance Agency’s Longboat Key branch, Allen would have a new insurance carrier with a lower rating this month that’s only been doing business in Florida for six months.

“Citizens is interested in shedding their policies,” Allen said. “But they can’t just drop you if you read the letter closely.”

The state is allowing Citizens, a government-created corporation formed in 2002, to reduce its policy footprint by pairing up existing customers with a dozen private insurance companies.

The goal is for Citizens to cut approximately 100,000 policies from its more than 800,000 policies. The government-run insurer was set up to be an insurer of last resort, but ballooned when many large private insurers left the state in 2007. Now, the state is trying to transition policies back to the private sector.

But Ceshker is worried his policyholders won’t even open the two pages in the envelope from Citizens that touts a new policy with a new carrier. And if they don’t open the letter and take action, Citizens automatically converts the policy to the private insurer listed in the letter.

Homeowners who want to stay with Citizens are required to send in an opt-out form.

“It’s not a good way to operate,” Allen said. “I came close to filing the letter in the trash. I’m urging my neighbors to watch their mail closely so they don’t get swept up in this boondoggle.”

And most of those letters don’t even include information about new rates for the private insurer.

“I don’t like the process at all,” said Ceshker, who said hundreds of his customers have gotten the letter. “If you don’t agree, you have to reply to the opt-out letter. It should be the other way around, and it’s confusing.”

Ceshker recommended Allen opt out and stay with Citizens for two reasons.

“The company wasn’t in business very long and doesn’t have a higher rating than Citizens,” Ceshker said. “I won’t put my customers in situations like that.”

Plus, Ceshker said Allen and other policyholders don’t know what the new rates are yet.

“It puts people in a tough spot,” Ceshker said. “The burden falls on me as an agent to research every company and see which ones I recommend making the move and which ones I don’t.”

If a letter highlights a company that has a good rating with rates that provide similar or more coverage, Ceshker said he will recommend policyholders make the move.

But that scenario hasn’t played out often, Ceshker said.

Ceshker worries about policyholders shifting to a new company and not having enough coverage if a storm hits the area. Of special concern to Ceshker are Longboaters who are insured for more than $200,000.

“Where I worry is if we have a customer insured for $500,000 and a new company can’t pay it after a storm hits the area,” Ceshker said.

The state only backs policies up to $200,000 if an insurer fails to honor its financial obligation.

“It’s a hard situation to stay on top of, but we’re trying to make sure no one slips under the cracks,” Ceshker said. “Everyone should check their mail carefully.”

Want to keep Citizens?
Check your mail closely for letters relating to Citizens.

Make sure you talk with your insurance agent about any letter
relating to an insurance carrier switch.

Fill out the opt-out form and send it to Citizens to keep your current policy in place.