Takeout Insurance in Florida
Posted By Givens Givens Sparks || Jun 3, 2013
Much has been written, both on this blog and in the news, about Citizens Insurance attempt to depopulate. On Monday, Garrett Riley blogged about the newest dubious "takeout" insurance company. To further clarify, "depopulating" Citizens means transferring policies from Citizens Insurance to a private insurance company. This process begins when policyholders are given a notice that their insurance policies are going to be transferred to a private insurance company. A "takeout" insurance company is a private company that assumes the liability associated with an insurance policy, in exchange for payment from Citizens.
A recent Tampa Bay Times article, written by Toluse Olorunnipa outlined the potential threat to homeowners when a private insurance company takes over policies from Citizens. According to the article, one third of the takeout insurance companies have folded, costing taxpayers $400 million. What the proponents of this push to depopulate will not tell you is that when any insurance company fails, all policyholders in Florida ultimately pay anyway. Anyone who purchases any property insurance in the state of Florida already pays into the Florida Insurance Guaranty Association, or FIGA.
Make sure to do your homework if you are asked to have your policy transferred from Citizens to a private insurer. You have the right to opt out.
EDIT - Since today's Times article, and my blog about this, Kurt Eichenwald of Vanity Fair has added his own column on the insanity of this process.