Citizens Property Insurance Company was formed when
Hurricane Andrew devastated South Florida in 1992.
To
answer the growing insurance needs of Florida
homeowners, the state legislature passed a law in 2002 to establish Citizens
Property Insurance Company by merging two state-run insurance entities.
The Florida Residential Property and Casualty Joint
Underwriting Association (FRPCJUA) and the Florida Windstorm Underwriting
Association (FWUA) are the two companies that make Citizens Property Insurance
Company.
Citizens Property Insurance Company was able to provide
insurance coverage with the merger of these two companies in Florida for
high-risk homeowners like Sarasota and those that aren't in these high-risk
areas but are nonetheless having trouble in obtaining coverage.
Citizens Property Insurance Company is a non-profit
insurance company. Getting insurance in high risk areas is the main aim of the establishment
of Citizens Property Insurance Company.
In the growth of Citizens Property Insurance Company, several
factors will be considered. The increase in policy volumes of Citizens Property
Insurance Company are due to the new developments in coastal areas and the
reluctance of other insurance companies to write new policies.
Citizens Property
Insurance Company handles three major accounts:
- High
Risk Accounts (HRA)
- Personal
Lines Accounts (PLA) and
- Commercial
Lines Accounts (CLA)
For high-risk area in Florida,
Citizens Property Insurance Company HRAs are comprised mostly of wind-only
policies. The wind-only policies of Citizens Property Insurance Company HRA
were originally written by the now defunct FWUA.
The Citizens Property Insurance Company PLAs are mostly
residential properties who are eligible for multi-peril policies written by the
Florida JUA.
While the PLAs protect residential properties, Citizens
Property Insurance Company CLAs cover commercial residential policies.
Citizens Property Insurance Company provides coverage in
high-risk areas up to $350,000 for repair costs and rebuilding of the house
structure. Excluding that, Citizens Property Insurance Company also pays for
the reconstruction of structures besides the house like fences, swimming pools,
and such.
In a policy written by Citizens Property Insurance Company, the
replacement of lost or damaged items and liability costs may also be included.
Citizens Property Insurance Company paid a cost of $1.77
billion in total damages for recent four hurricanes that hit Florida - Charley, Frances,
Ivan, and Jeanne. The damages forced Citizens Property Insurance Company to
raise their windstorm policy premium price up to 67 per cent.
Executives at Citizens Property Insurance Company are unsure
whether they have adequate funds to cover the claims. Citizens Property
Insurance Company is facing a predictable $925 million in losses with Hurricane
Charley alone.
An additional $332 million was caused due to Hurricane
Jeanne according to Risk Management Solutions for Citizens Property Insurance
Company, not including the damages caused by the smaller hurricanes Ivan and Frances,
which cost up to $532 million total
Directed by the Board of Governors, Citizens Property
Insurance Company is directed by the Board of Governors, which is comprised of
seven members who are appointed by the State Treasurer for three year terms.
Citizens Property Insurance Company also has a technical
advisory board in addition to the Board of Governors. This board provides
information and advice to Board of Governors of Citizens Property Insurance
Company.
These board members at Citizens Property Insurance Company
represent the diverse geographic regions of the state.
Prior to they are eligible for coverage, Citizens Property
Insurance Company has set some requirements that Florida
property owners must meet.
For PLAs, Citizens Property Insurance Company can
only provide coverage for those who are not able to obtain standard policies
from the open market.
For commercial properties that are not insured by other
insurance agencies, Citizens Property Insurance Company can offer CLA
protection.
Citizens Property Insurance Company offers their PLAs
comprehensive multi-peril policies that are based on the market's HO-3, HO-4,
or HO-6 policy. The basic personal lines policy of Citizens Property Insurance
Company offers the same coverage as an HO-8 policy in the open market.
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