One of the very few Florida property insurers that is “A” rated by one of the state’s leading private rating firms is rapidly downsizing. State-run Citizens Property Insurance is busy handing hundreds of thousands of its Florida policyholders in bulk to young, lower-rated small insurers in the state.
Many have never handled a hurricane claim.
If that scenario gives pause on the eve of Florida’s 2015 hurricane season, it should.
If this season passes without a major storm making landfall here, Citizens officials will pat themselves on the back for re-injecting Florida policyholders — their former customers — back into the hands of private insurers. Reviving a competitive market for private insurance remains, after all these years, the goal in a state that suffered Hurricane Andrew in 1992. That devastation sent major insurance companies fleeing the state and, more than two decades later, saw the rise of a large crop of small private insurers in the state willing once again to test the financial odds against Mother Nature.
And should a hurricane wallop a major metro area in Florida this year? Young property insurers that loaded up quickly on Citizens castoff policyholders may find themselves overwhelmed —and Citizens re-inheriting many customers it was so quick to jettison.
Welcome to the annual crapshoot that is the Sunshine State’s hurricane season.
