If you’ve recently received a letter from Citizens Property Insurance Corporation informing you that another insurance company wants to take over your homeowners insurance policy, you may be wondering what it means and what you should do next.
Does this mean you’re losing your insurance? Will your premium increase? Can you stay with Citizens, or do you have to switch companies?
These are common questions among Florida homeowners, especially as more private insurance companies participate in Citizens’ Depopulation Program.
The good news is that receiving a takeout letter doesn’t necessarily mean something is wrong with your coverage. However, understanding your options and responding before the deadline is extremely important.
Here’s what Florida homeowners need to know before making a decision.
What Is a Citizens Insurance Takeout Letter?
A Citizens insurance takeout letter is a notification that one or more private insurance companies are interested in assuming your existing Citizens insurance policy.
This process is part of the Citizens Depopulation Program, which is designed to move eligible policies from Citizens, Florida’s insurer of last resort, into the private insurance market.
When your policy is selected, Citizens sends a packet outlining the available private insurance offers, estimated renewal premiums, and coverage comparisons.
Depending on the offers you receive, you may have the option to remain with Citizens or may be required to move to a private insurance company.
Important: Receiving an offer doesn’t mean your insurance is being canceled immediately. However, the letter may require action on your part.
Can You Stay With Citizens Insurance?
One of the most important things homeowners need to understand is Florida’s 20% rule.
Under current Florida law, if you receive an offer from an authorized private insurance company with an estimated renewal premium that is no more than 20% higher than Citizens’ estimated renewal premium, you are no longer eligible to remain with Citizens.
Here’s an example:
Let’s say your estimated Citizens homeowners insurance renewal premium is $3,000 per year.
- Private insurance offer of $3,500: Because the offer is less than 20% higher, you would generally be ineligible to remain with Citizens.
- Private insurance offer of $3,700: Because the offer is more than 20% higher, you may be eligible to remain with Citizens, provided no other qualifying offer makes you ineligible.
The rule applies even if you’d prefer to stay with Citizens.
If you’re eligible to remain with Citizens, you must actively register that choice before the deadline stated in your letter.
What Happens If You Ignore the Takeout Letter?
Ignoring your takeout letter can have consequences.
If you don’t register a choice by the deadline, Citizens will generally assign your policy to the private insurance company offering the lowest estimated renewal premium.
Also, Citizens no longer provides a 30-day period after an assumption during which you can simply choose to return. Once a policy has been assumed, the transfer is final, although you may be able to seek new coverage elsewhere subject to eligibility.
This is why it’s important to review your letter as soon as possible rather than waiting until your renewal date.
Will Your Insurance Premium or Coverage Change?
When a private insurance company assumes your Citizens policy, your existing premium and coverage generally remain unchanged for the remainder of your current policy term.
However, when your policy approaches renewal, the new company will offer its own renewal terms.
At that point, you should carefully review the premium, coverage limits, deductibles, exclusions, and any additional conditions.
A lower premium isn’t necessarily the best deal if it also means accepting less coverage or higher out-of-pocket expenses following a claim.
Five Things to Review Before Accepting a Citizens Takeout Offer
Before making a decision, consider the following:
1. Compare the insurance premiums.
Review the estimated renewal premium offered by the private insurer and compare it with Citizens’ estimated renewal premium. Remember that estimated premiums aren’t necessarily final.
2. Review your hurricane deductible.
Florida homeowners should pay particular attention to hurricane deductibles. A policy with a higher deductible could leave you responsible for thousands of dollars in additional expenses after a covered hurricane loss.
3. Understand your coverage limitations.
Insurance companies don’t always provide identical coverage. Compare important protections such as water damage, roof coverage, personal property, liability, and loss-of-use benefits.
Also, remember that standard homeowners insurance generally does not cover flooding. Separate flood insurance may be necessary.
4. Research the insurance company.
Consider the company’s financial condition, insurance ratings, customer service, and claims-handling practices. You can also review company information through the Florida Office of Insurance Regulation.
5. Explore other insurance options.
You aren’t limited to accepting the first private insurance offer in your takeout packet.
An independent insurance agency may be able to help you compare additional insurance companies to determine whether another policy offers more suitable coverage or competitive pricing.
Should You Accept the Private Insurance Offer or Shop Around?
There’s no single answer that works for every Florida homeowner.
In some cases, the private insurer assuming your Citizens policy may offer competitive pricing and broader coverage.
In other cases, comparing additional homeowners insurance quotes may reveal different options that better match your coverage needs and budget.
Before switching, consider what matters most to you: affordability, protection against hurricane damage, manageable deductibles, and confidence in your insurance company.
The objective shouldn’t simply be to find the cheapest homeowners insurance policy. It should be to find an appropriate balance between cost and coverage.
How Green Leaf Insurance Services Can Help
At Green Leaf Insurance Services, we understand how confusing Florida homeowners insurance can be, especially when you’re unexpectedly notified that your policy may be transferred to another company.
As an independent insurance agency serving homeowners throughout Florida, we help clients understand their options and compare available coverage from multiple insurance companies.
Our team can help you:
- Review your Citizens takeout letter and understand your available options.
- Compare homeowners insurance quotes from participating insurance companies.
- Evaluate differences in premiums, deductibles, and coverage.
- Identify potential savings and insurance discounts.
- Make a more informed decision about protecting your home.
Whether you live in Miami-Dade, Broward, Palm Beach, or elsewhere in Florida, we’re here to help you navigate your homeowners insurance options with confidence.
Don’t Make an Insurance Decision Without Reviewing Your Options
If you’ve received a Citizens takeout letter, don’t ignore it or assume that the insurance company listed in your packet is necessarily your best option.
Take a few minutes to understand your choices, review your coverage, and consult with a knowledgeable insurance professional before your deadline.
Received a Citizens takeout letter? Let Green Leaf Insurance Services help you explore your options.
Contact us today for a complimentary homeowners insurance quote comparison.
Green Leaf Insurance Services, Inc.
Phone: (305) 363-2170
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Coverage, premiums, discounts, and eligibility vary by insurer, property, and policy. The information in this article is educational and does not replace the terms of your Citizens takeout letter or insurance policy.
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