Plus, depopulation, condo questions, wildfire dangers
Citizens Property Insurance is trying to find ways to help its policyholders with Hurricane Helene flood claims, nearly 90% of depopulation offers to Citizens this month qualify for removing policies, condo questions and answers, plus a new study finds that Florida has a high risk of financial losses from wildfires. It’s all in this week’s Property Insurance News.
Hurricane Helene Flood Claims: The Citizens Board of Governors met last Wednesday, the day before Helene’s landfall, and discussed the likelihood that a bulk of its hurricane claims would be for flood, rather than wind damage. Like other homeowners insurance policies, damage from ground flooding isn’t covered by Citizens policies. But because of a new requirement being phased-in that Citizens policyholders must acquire separate flood coverage, the Board directed staff to help policyholders in any way possible in filing their claims with the National Flood Insurance Program (NFIP) or private flood carriers. Such efforts could include expediting its declination of coverage letters to policyholders, as required by the NFIP and other carriers.
Citizens Depopulation & Other News: Citizens has “an exciting very, very, busy fourth quarter planned, record-breaking actually” said Jeremy Pope, its Chief Administrative Officer at the recent Market Accountability Advisory Committee meeting. With 11 private insurance carriers looking to participate in the October, November, and December depopulation programs, Pope said his forecast is for 337,522 policies to be assumed (from the current 1.25 million Citizens policies), representing $162.2 billion in exposure removed. “That’s a very conservative forecast,” he added. Preliminary results of the current October depopulation of as many as 414,000 policies shows 90% of the offers made are within the 20% price of the Citizen’s premium, making those policies ineligible to remain with Citizens, the “sign of a healthy market,” Pope said.
The depopulation numbers re-opened the discussion and point of contention by some of the insurance agency members on the committee, who again wondered why private carriers aren’t just writing these policies directly, rather than letting them come to Citizens first only to be later depopulated. “Such a stupid concept,” remarked one member. The growing frustration by agencies includes LSAs, and carriers not offering comparable coverage with water damage in their depopulation takeout policies. Agencies are concerned carriers can entice with an LSA within the clearinghouse, yet write the policy directly with the consumer. Also newsworthy, is a very comprehensive and significant revamp of Citizens’ agreements with both its agencies and with individual agents, approved last week. You can read our complete report here.
Lisa Miller, far right, seated with Florida State Senator Alexis Calatayud, speaking with condo association presidents and property managers, September 18, 2024
Condo Questions: I was in Miami the week before last to address the first joint meeting of Key Biscayne condominium association presidents and property managers. They, like many of the rest of Florida’s 13,841 condo associations, have questions and concerns about the December 31 deadline for 30 year-old or older high-rise condo buildings to undergo mandatory milestone structural safety inspections and to complete reserve studies for structural repairs and maintenance. During my visit, the group wanted projections on insurance rates in the next two to three years as they begin preparing their new 2025 associations’ budgets. I explained that if reinsurance rates go down in 2025, then we might see a decrease. Many in the audience have their condo associations and their individual units insured through the state-backed Citizens Property Insurance, which is awaiting approval for a 14% increase. I was pleased that state Senator Alexis Calatayud spent the entire meeting with us engaging with the members and listening to the challenges they are facing in the current market. You can read more in my Lisa’s Blog.
Some of the 600+ acre wildfire in Bay County, March 31, 2019
Florida Wildfire Danger: As if major hurricanes aren’t enough, a new report by LendingTree shows Florida has the second highest financial risk in the country from wildfires. Annual Florida losses are $269 billion, behind California’s expected $1.4 billion and ahead of Texas’ $240 million in those losses. Wildfires are up 17% from 2021 to 2022, the most recent stats available. Where’s there’s lightning, there can be fire. Florida reported the highest number of lightning-related homeowners insurance claims in the country in 2022, with 5,504 claims submitted at an average cost of $14,562 per claim. Insurance Business reports that the insurance and reinsurance group Chaucer has concluded that many catastrophe models are now “out of step” with wildfire risk and cannot accurately gauge the scope of potential damage.
LMA Newsletter of 9-30-24
