Florida Take Out Insurance Companies – How to Avoid Unexpected Surprises

build a customer base. When these companies are formed, they have an easier time attracting capital because investors know that the take out companies will start earning premiums immediately after they start removing policies from Citizens.

Despite all the good that comes from reducing the number of Florida home insurance policies in Citizens Property Insurance, the take out program is not without its problems.

Policyholders are often concerned about the financial stability of the take out insurance companies. Many are start up companies and have a small surplus available to pay claims of million or less. With Florida hurricane claims averaging ,000 or more, even after a company’s reinsurance kicks in, there might not be enough money to pay all of the claims.

Many of the take out companies were formed after the 2004/2005 Florida hurricane seasons. Policyholders are concerned that if their home has a hurricane claim in 2009, that their home will be “on-the job” training for the customer service staff at these newly formed companies – inexperience that might result in evaluating and paying claims in a timely fashion.

The take out companies are very selective about the policies they take from Citizens – leaving the oldest, most poorly constructed coastal homes sitting right in the middle of hurricane alley still on the books of Citizens. This makes the Citizens book of business even more under funded than it was before the