For a long time, Robert Peters resisted a push to leave state-run Citizens Property Insurance Corp. to get homeowners coverage from a smaller company he knew nothing about.
When he finally acquiesced three years ago, his policy shifted to Homeowners Choice Property & Casualty Insurance — and he's regretted it ever since.
"When I called over there, they tried to put me off and I said, 'I don't like this runaround, I'll just go over there and speak with them,'" he said.
Peters' Citizens policy was one of about 800,000 that were taken out of the company to go back into the private market over the last four years through what's known as a "depopulation" program. The program aims to take some financial burden off the state insurer and give homeowners comparable rates with private companies vetted for their financial worthiness.
But there isn't any vetting for customer service, leaving many customers to grind their teeth with limited options.
On the positive side, the so-called Citizens' takeout companies appear to have a smaller ratio of complaints per policyholder than three of the four largest private insurers in the state — and even compare favorably to the company they're leaving: Citizens.
Many complaints for the takeout companies touch on consistent themes. In complaints filed with state agencies, posted on social media and submitted to the Better Business Bureau, policyholders object to difficulty reaching representatives, poor communication during claims processes and seeing their rates rise with little explanation.
The "depopulation" program's current incarnation ramped up in the early 2000s to lower the number of policies that Citizens had in its portfolio. Fewer policies puts less of a financial strain on Citizens and taxpayers, who end up subsidizing the low rates that Citizens offers. It also makes the insurer more nimble when responding to large events such as a hurricane.
"In the last couple years, we think we've returned to the role that we were created for, and that's to be able to insure insurable policies that cannot find comparable coverage in the private market," Citizens spokesperson Michael Peltier said.
Since 2014, just under 816,000 policies have been shifted from Citizens to private insurers. Roughly 416,000 were moved in 2014, dropping steadily each year. Last year, only 34,000 policies were taken out of Citizens.
The Florida Office of Insurance Regulation must pre-approve every company that would like to take a policy out of Citizens, verifying they are financially stable.
Currently, there are 29 companies approved for take-outs. Just seven of those took policies out of Citizens in 2017 — Avatar Property & Casualty Insurance Co., Homeowners Choice, Maison Insurance Company, National Specialty Insurance Company, SafePoint Insurance Co., Southern Oak Insurance Co. and Weston Insurance Co.
The office of Florida's Chief Financial Officer maintains a database of complaint data against insurers and compares the number of complaints against the number of total policies that company had at the time.
Of the seven companies, National Specialty had the worst track record of complaints to policies from with one complaint per 4,428 policies, though data was only available for 2017. Next were Southern Oak with one complaint per 5208 policies from 2014 to 2017, Homeowner's Choice with one complaint per 5,812 policies, Avatar with one complaint per 7,917 policies, Weston with one complaint per 9,667 policies and SafePoint with one complaint per 18,475 policies. Data was not available for Maison.
Citizens had a worse ratio than any of the seven companies for those three years, with one complaint per 1,558 policies.
The Attorney General, which collects complaints against insurance companies to a lesser extent, received 24 complaints against five of the seven companies since 2016 — SafePoint (nine), Avatar (seven), Homeowners (five), Weston (two) and Southern Oak (one). Two — Maison and National Specialty — had zero complaints.
One of the most common complaints is that their rates have unexpectedly gone up.
Lynne McChristian, Florida representative for the Insurance Information Institute, said some increase is to be expected.
"The rates of Citizens have been artificially low," McChristian said, because Citizens has a mandated cap on rate increases. When policyholders move to the private market, "what they're getting charged is the market price."
Citizens maintains that the burden of vetting is on OIR.
"They apply to OIR, so Citizens has no choice as far as who the takeout companies are or who qualifies and who doesn't," Peltier said. "That's solely the responsibility of OIR."
The rate at which Citizens policyholders are depopulated will likely slow in coming years. Currently, Citizens has about 440,000 policies. While the insurer hasn't set a target policy count, Peltier said this is fairly close to an equilibrium. Citizens estimates that there are about 450,000 policies that cannot get coverage in the private market.
"Because we're sort of hovering around that number, the number of folks that have been affected by the depopulation program has dropped substantially," he said. "That probably won't change unless we have a big event and private insurers start non-renewing policies and Citizens starts to increase our number again."
Even then, it will be less likely property owners will wind up inside Citizens. The state created a clearinghouse in 2014 that checks all applicants' information against the private market to see if there is potential for coverage other than Citizens. If a private company can offer a policy within 15 percent of the rates that Citizens offers, that applicant will have to accept it.
Contact this reporter at email@example.com or (727) 892-2249. Follow @malenacarollo.