Talking about insurance can be overwhelming. Let’s face it – insurance can be complicated, and most people aren’t thrilled to discuss it. But there are some unique programs available to Citizens policyholders.
Understanding your home insurance and related Citizens programs is key to becoming an informed consumer, making the most of the program opportunities and taking advantage of benefits that can help you if disaster strikes.
Let’s take a quick insurance journey to learn about one of those important programs: the Clearinghouse Program.
What Is the Clearinghouse?
The Clearinghouse is a Citizens-specific program established by Florida law to help agents verify policy eligibility for most personal lines policies with Citizens. Any time you apply for such a policy with us or when your policy renews, the policy must go through the Clearinghouse. This is an important step to determine eligibility for a Citizens policy and for applicants and policyholders to learn about private-market options. As the Florida property insurance market continues to stabilize and new carriers come to the state, insurance customers have even more coverage options beyond Citizens.
How Does It Work?
Your agent will collect coverage and rate comparisons for you to review. If you are a new customer, your agent will research the market and provide you with options. If a private market insurer makes an offer of comparable coverage that is not more than 20% greater than Citizens' premium, you will not be eligible for a policy with Citizens. Because we are Florida’s insurer of last resort, your agent must provide us with proof of either a declination from another carrier or proof that the other carrier’s offer is more than 20% greater than Citizens’ premium to be eligible to apply for coverage with Citizens.
The process is similar for Citizens’ policies going through a renewal cycle that are subject to the Clearinghouse. Every such policy is "shopped" through the Clearinghouse. That is to say, every policy has a chance to be offered comparable coverage by a private-market insurer. The determining factor to remain with Citizens comes down to the other carrier’s offer. If the offer of comparable coverage is within 120% of the Citizens renewal premium, you are no longer eligible for coverage. If the offer exceeds 120% of our offer and offers comparable coverage, you may remain with Citizens.
How Does It Benefit Me?
Beyond cost savings, private-market carriers may offer coverage that we simply do not offer, providing more protection for your home and potentially closing gaps in coverage for your situation. Some carriers may also offer bundled coverage discounts if you have multiple policies through them.
It’s no secret that Florida’s property insurance market is becoming more competitive. Since recent Legislative reforms were enacted, at least 17 new insurers have entered the market. Although you may pay more with another carrier, the coverage options they offer may be better suited to your needs – and as more private insurers enter the market, it’s expected that prices and coverage options will continue to become more competitive and beneficial to you, the policyholder.
Securing private-market coverage also reduces your assessment risk if Citizens is unable to pay claims after a severe storm or series of smaller storms, which is ultimately a cost savings for you.
Clearinghouse Puts You First
The Clearinghouse is a valuable comparison tool to help verify that you’re getting comprehensive coverage, at a competitive price, and optimizing offers from new companies in the marketplace.
Although insurance can be complicated, we’re here to ensure our policyholders are in the best hands possible! Contact your agent if you have questions about the Clearinghouse or your coverage options.
