Because Citizens Property Insurance Corp. provides insurance to many Florida homeowners, changes in Citizens policies can adversely impact many policyholders. A recent change that took effect on January 1, 2015 will adversely impact many Florida homeowners. Citizens is reducing the cap on the value of property for which it provides coverage. This change will affect individuals who own high value properties by reducing the maximum value of property covered from $1 million to $900,000.
The Florida Legislature enacted a 2013 property reform law that included a provision reducing the upper limit on Citizens’ insurance policies. The lower limit will apply to virtually all new policies and renewals on all high value properties. The rationale behind the change was to reduce the risk of financial exposure to Florida’s quasi-public insurance carrier. Advocates of the reforms contend that the modification will not harm homeowners because there is sufficient coverage in the private insurance market.
The structure of the new legislation involves a multi-tier reduction in the maximum amount of coverage. Any property, including single condo units and their contents, valued at over $900,000 no longer qualifies for coverage by Citizens. Existing policies covering properties valued between $900,000 and $1 million as of December 31, 2015 will continue to be covered until the expiration of the coverage term, but the policies will not be renewed.
The second two tiers in reduction will take effect in January 2016 and January 2017. The maximum value of properties that can be covered by Citizens will be reduced to $800,000 as of January 2016. The amount drops to $700,000 in January 2017.
While the lower coverage limits will apply to residents of most Florida counties, Miami-Dade County and Monroe County will continue with a $1 million upward limit for coverage. These two counties fall under an exception that applies to counties without a “reasonable degree of competition.” Citizens issues 96.8 percent of the policies to homeowners in Monroe County and 62.5 percent of homeowners policies in Miami-Dade County.
If you are homeowner with a high value property in either Monroe or Miami-Dade counties, you do not face the prospect of having your coverage cancelled because of this change in the law. Owners of high end properties in other counties might want to explore alternatives now in anticipation of their policy not being renewed. Because policies can differ dramatically in terms of the types of perils covered, policy limits and premiums, homeowners should start researcher their options now.
When selecting a policy, you should review the entire policy carefully. If you have questions about what is included in coverage and what is excluded, you should ask the agent. If you have questions about the language of the policy that you find concerning, you should seek legal advice. Admittedly, insurance policies can be lengthy and convoluted, but a careful reading can ensure you are purchasing the protection you need.
If you have questions about Florida insurance claims, you are welcome to contact my Florida insurance claims dispute law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.