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Customers of 'insurer of last resort' will soon have to shop around

Starting April 1st Citizens customers will be required to get a quote from a private insurance company before renewing their policy with Citizens.
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Posted at 10:05 PM, Mar 27, 2023

New changes are going into effect this week that could cost Citizens Insurance customers hundreds of dollars a year.
As part of a series of bills passed by the Florida legislature in December, starting April 1st Citizens customers will be required to get a quote from a private insurance company before renewing their policy with Citizens.
If that quote comes within 20% of Citizens, they will be required to switch to the other provider.
Even if it’s more expensive.

“Say your premium is $3000. If (the competing quote) comes under $3600 you need to move your policy. You have no option,” said Mark Friedlander with the Insurance Information Institute.

The state-run insurer of last resort has seen its customer base skyrocket in the last three years.
In 2020, there were a little more than 400,000 policy holders.
By 2023, there were 1.2 million.

“Citizens is a backstop insurer. It’s the state-run insurer of last resort. It’s not a first or only choice for consumers,” Friedlander said. “Citizens is not a lifetime pass for lower rates. Because typically citizens rates are below the market.”

One reason why Citizens grew so rapidly is because there were fewer options for homeowners.
But Friedlander says there is some optimism about the current insurance marketplace.

“The market is opening up a little bit,” said Friedlander. “Some agents are telling us they are able to shop their customers, more than they were able last year.”