TAMPA, Florida — Hundreds of thousands of people are getting letters giving them alternatives to their Citizens Property Insurance policy.
It's all a part of the Citizens Property Insurance depopulation program. For those who received a letter and aren't happy with their options, they could choose the excess and surplus lines market.
"They are very legit and strong companies. Typically have high financial strength ratings," said Mark Friedlander, who serves as the director of corporate communications for the Insurance Information Institute.
There is one catch.
"They don’t need to have the rates approved by the Florida Office of Insurance Regulation," Friedlander said.
Which really means they can charge what they want.
"In most cases, that may lead to a much higher price than what you would get with a Florida insurer," Friedlander said.
Friedlander explained the excess and surplus lines market isn't protected by the Insurance Guaranty Association. That means, "If you go with the excess and surplus lines market and that insurer goes insolvent, you have no protection in terms of outgoing claims," he said.
For some homeowners, this is their only option.
"High-value homes in coastal areas, the excess and surplus lines market may be the only option," Friedlander said.
Friedlander said people should get an agent to shop for the best price.
"It's unlikely you will get a better rate with the excess and surplus lines insurer than a takeout offer that is 15 percent more than what you are paying for Citizens today."
A date to keep in mind is Sept. 27 because that’s when Citizens Property Insurance will present the board with their rate increase. It could be the highest increase to date. Citizens is hoping to have it in effect this December.