Florida’s Citizens Drops Limits on High-Value Properties

Florida’s state-backed property insurer has lowered the amount of coverage it provides for high-value properties from $1 million to $900,000, per a 2013 law change.

Citizens Property Insurance Corp. began implementing the change on almost all new and renewal high-value business as of January 1.

Florida lawmakers in a 2013 property reform law included a provision calling for lower limits on Citizens policies. Supporters argued that there is ample coverage for these policies in the private market and doing this would reduce Citizens overall exposure.

The 2013 law created a three-tier coverage reduction with the first scheduled to take effect this year.

Under the law, any property that has a dwelling replacement cost of $900,000 or more is no longer eligible for Citizens coverage. The law also applies to single condominium units that have a combined dwelling and contents coverage of more than $900,000.

Properties that fall between the $900,000 and $1 million level as of December 31, 2015 may retain their Citizens coverage until the expiration of their current policy.

In January 2016, the coverage limit amount is to likewise be reduced to $800,000. Finally, come January 2017, the coverage limit will be reduced to $700,000 where it will stay.

The new coverage limit applies in 65 out of Florida’s 67 counties. Two counties, however, will remain at $1 million due to a law change that calls for no change in coverage limits where regulators find there is no “reasonable degree of competition.”

Meeting that criterion, according to state regulators, is Monroe County where Citizens writes 96.8 percent of the market. If the coverage level had been reduced to $900,000 it would have affected 251 Monroe policyholders with a Citizens premium of $1.3 million.

The same holds true for Miami-Dade County where Citizens represents 62.5 percent of the market. By keeping the coverage level at $1 million, 548 policyholders will not lose their Citizens coverage. Those 548 policies represent $3.5 million in policies.