Changes of Citizens Insurance Could Affect Those With Wind Insurance in Monroe County

Monroe County, Fla. – On Dec. 14, the Florida Legislature passed the special session bills concerning property insurance, Hurricane Ian disaster relief, and toll discounts. Senate Bill 2A, the property insurance bill, includes several significant changes to the state-backed Citizens Property Insurance Corporation (Citizens). Citizens hold a majority of the wind insurance policies in Monroe County.

For Citizens policyholders, it’s important to know that Senate Bill 2A includes the following changes:

• Under the former law, policyholders were not required to go to a private insurance company that offered a competing premium (take-out company). However, if you choose to go to a take-out company that increases your premiums more than the glide path for Citizens, you could re-enroll in Citizens. With the new law, you are now required to leave Citizens (upon renewal) and go to a take-out company if the company offers you a premium up to 20 percent more expensive than your Citizens renewal premium. Once out of Citizens, the new company can increase your premium to 20 percent annually, and you cannot return to Citizens. Glide path protections do not apply to private insurance take-out companies.
• The new law removes non-primary homes from the glide path protections (except for those non-primary homes that serve as the primary residence of a long-term tenant of at least 9 months).
• With the new law, Citizens policyholders claiming water damage have the burden to prove the water damage was NOT caused by flooding. Formerly, Citizens had to prove that water damage WAS caused by flooding.
• The new law requires Citizens policyholders in flood zones to carry flood insurance, effective in April for new policies and July for renewals. The requirement is phased over the next four years for Citizens-insured properties not in flood zones, depending on home value.
• Under the former law, Citizens was liable for the legal costs incurred by a Citizens policyholder that successfully sued Citizens for denial or underpayment of a claim. Under the new law, Citizens is no longer liable for legal costs.
• The new law maintains the current glide path protections established in prior law, which cap annual increases to 11 percent this year, 12 percent next year, 13 percent in 2024, 14 percent in 2025, and 15 percent in 2026 and all subsequent years.

After the final legislative vote, the Speaker of the House indicated more work on insurance would be done during the regular legislative session starting in March 2023.