The Buzz

From the staff of the Tampa Bay Times

Citizens president urges consumers to leave 'government-created insurer'

10

October

 After five private insurance companies sent out 210,000 letters to Citizens Property Insurance customers offering to take over their policies last week, Citizens president has been following up with a letter of his own.

The letter represents the first time state-run Citizens has taken such an active role in promoting the private takeover of its policies.

“This offer means that you are no longer limited to receiving property coverage from a government-created insurer,” reads the letter signed by Citizens’ CEO Barry Gilway. “We urge you to carefully consider this important insurance decision.”

Written in bold-typed, one sentence in the letter sticks out: “You do not need to take any action to begin your insurance coverage with [NAME OF INSURER].”

That is significant because the takeout program requires homeowners to proactively opt-out within 30 days if they do not want to be taken out of Citizens into a private insurer. Homeowners who receive the letter and take no action will be automatically shifted out of Citizens into a private company that likely will have higher rates when the policy renews. Gilway’s letter does not mention the 30-day opt-out deadline.


A story published last week shows some of the pros and cons of leaving Citizens for a smaller private firm.

Citizens said it created the new letter after receiving complaints from consumers who were skeptical of “takeout” offers they received from private companies in the past.

“The letter is intended to reassure consumers that the offer is official and that we are involved as well as make them understand what they need to consider when making their decision,” a Citizens spokesperson said in a statement.

The takeout of 210,000 policies is part of the state-run insurer’s campaign to aggressively slim down. Citizens has also been trying to reduce the rate of opt-outs, as more than 30 percent of homeowners who have received the letters in the past have proactively chosen to deny the takeout offer.

Read Gilway's letter here

@ToluseO

[Last modified: Wednesday, October 10, 2012 11:24pm]

Join the discussion: Click to view comments, add yours

Loading...