For This Reason, The Citizens Property Insurance Corp Was Created

Category: Finance.

Florida homeowners, especially those in high- risk areas, experience a difficult time getting insurance coverage for damages caused by hurricanes and windstorms. For this reason, the Citizens Property Insurance Corp was created.

Many private insurance companies are almost adamant at writing new policies that are specific to their insurance needs. Citizens Property Insurance Corp was formed from the combination of two state- owned insurance entities. The Florida legislature passed a law in 2002 combining these two companies in order to create the Citizens Property Insurance Corp. These insurance companies that make Citizens Property Insurance Corp are the Florida Residential Property and Casualty Joint Underwriting Association( FRPCJUA) and the Florida Windstorm Underwriting Association( FWUA) . When they formed the Citizens Property Insurance Corp, it was their aim to provide insurance coverage for Florida homeowners who are unable to get insurance coverage from the private insurance market. Just recently, four hurricanes hit Florida and devastated several homes. The reluctance of private insurance companies to fund coverage for homeowners in high- risk Florida is not without reason.

According to estimates as of July 28, Citizens Property Insurance, 2004 Corp has a total of 78, 257 insurance claims to evaluate. As such, Citizens Property Insurance Corp can offer coverage of up to$ 350, 00This amount from Citizens Property Insurance Corp covers damages and the cost of repair and rebuilding. Citizens Property Insurance Corp is a state- run insurance company. Aside from the actual house, Citizens Property Insurance Corp also pays for the reconstruction of other structures, swimming pools, such as fences, and such. After hurricanes Charley, Ivan, Frances, and Jeanne wreaked havoc in Florida, Citizens Property Insurance Corp faces a total net loss of$ 77 billion. In addition, Citizens Property Insurance Corp includes coverage for replacement of lost or damaged items and liability costs. According to Risk Management Solutions, a separate entity that reviews damages to be covered by insurance, there are almost 92, 000 homeowners who are filing claims at Citizens Property Insurance Corp.

In a report filed by Risk Management Solutions, Hurricane Jeanne takes$ 252 million in damages from Citizens Property Insurance Corp High- Risk Accounts( HRA) . $53 million is the estimated number for the former Florida JUA Personal Lines Account( PLA) of Citizens Property Insurance Corp. This number, 743 more than, which is 13 what Citizens Property Insurance Corp earlier projected, is still expected to rise within the next few months. And for the Commercial Lines Account( CLA) , Citizens Property Insurance Corp will pay for$ 27 million. Citizens Property Insurance Corp will suffer$ 225 million in wind- only policies from Hurricane Frances. For Hurricane Ivan, Citizens Property Insurance Corp will cover close to$ 232 million total from damages in all three accounts, including the wind- only, residential multi- peril, and commercial residential policies. In addition, Citizens Property Insurance Corp has to prepare$ 65 million to cover their Personal and Commercial lines accounts.

With an estimated$ 850 million cost in High- Risk Accounts, according to Risk Management Solutions, Citizens Property Insurance Corp faces a total of$ 925 million in all three accounts. It is Hurricane Charley that will take the biggest cut from Citizens Property Insurance Corp. Citizens Property Insurance Corp has raised their premium prices on their windstorm policy so they could keep up with all these claims. On the average though, Citizens Property Insurance Corp only increased their yields to 19 per cent in their two other policies. The increase of Citizens Property Insurance Corp premium could reach up to 67 per cent.