Group takes swipe at Citizens

TALLAHASSEE, Fla. – Oct. 1, 2007 – Thinking about getting a policy with Citizens Property Insurance? The Florida Association of Insurance Agents wants you to think carefully about such a decision.

The group warned Thursday that customers of the state-backed insurance company may receive less coverage and be subject to higher assessments than homeowners with policies from other insurers.

Citizens, created to serve as Floridians’ insurer of last resort, has become the first choice – or the only option – for more and more residents, the association noted. “It’s such a different marketplace now,” said Jeff Grady, president of the FAIA. “Customers are walking into agents’ offices, asking for Citizens by name.”

The group said savvy consumers should be aware of several potential gaps in Citizens’ coverage:

Personal-property coverage for a homeowner’s possessions is capped at 50 percent of the home’s value.

Medical payments won’t exceed $2,000.

Liability coverage is limited to $300,000.

There’s no animal-liability coverage, so the homeowner is responsible for lawsuit-related costs if a family pet injures someone.

There’s no coverage for libel or slander lawsuits.

Citizens pays only half of what some other carriers pay when a policyholder can’t live in a home because of storm damage.

Of course, the group may have more than consumers’ financial interests at heart in pressing Floridians to look beyond Citizens’ state-backed coverage.

“Citizens pays 6 percent commission,” said Tom Cotton of Hugh Cotton Insurance in Orlando. “Every other carrier I’ve got pays 10 [percent] or more.”

For its part, Citizens said Thursday that it meets or exceeds the standards set forth by the state and industry experts.

The company’s payments when a policyholder can’t live in a damaged home are comparable with those of other companies, and its medical-payments coverage is twice the industry standard, Paul Palumbo, Citizens’ senior vice president of underwriting, said in a news release.

And in May, state lawmakers approved a measure allowing homeowners to purchase property-insurance policies from the state-backed insurer as long as premiums for the Citizens policy cost at least 15 percent less than a comparable policy from a private insurance company.

Those are among the reasons that Citizens has become such an attractive option for Florida homeowners, local insurance agents said.

“Most of the people just want the house coverage – I don’t think they’re looking for all these little quirks,” said Toni DeToma of Mid-Florida Insurance Services in Winter Park.

Still, the agents said they’re careful to explain the pros and cons of Citizens’ coverage – especially when a potential client or customer begins the conversation by stating that they want a policy from Citizens.

“We show them line by line a comparison” with a private insurer, said Kimberly Nabors of Lucille Lang Insurance in Orlando.

Citizens had issued nearly 1.4 million policies to Florida homeowners as of Aug. 31, according to the company’s Web site.

Copyright © 2007 The Orlando Sentinel, Fla., Anika Myers Palm. Distributed by McClatchy-Tribune Information Services.