TALLAHASSEE, Fla. – The state's property insurer of last resort is taking a step in reducing the number of policies the company has. The reduction may save some policy holders money, while costing others more.
With 1.2 million policy holders, Citizens no longer wants to be the state's largest insurer.
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"One of our goals has been to shrink Citizens down to the insurer of last resort," said Citizens spokesperson Mike Peltier.
Citizens is spending almost $45 million over 10 years to move policyholders to a private company. New applicants will be required to go through a clearinghouse being set up by the contract.
If they're offered private insurance no more than 15-percent higher than citizen's rates, they won't be allowed to use Citizen's.
Lawmakers passed a bill which was signed into law by the governor, which will help Citizen's reduce their policy count number.
"That was the big reform from the legislature, to try to reduce the size of citizens and we support it," said Sam Miller of the Florida Insurance Council.
Citizens said it's a two-prong approach: The first point is to make the company the insurer of the last resort; The second goal is to make sure customers are receiving the best coverage possible.
"To provide customers with what may be comprehensive coverage then they can with Citizens policy," said Peltier.
The clearinghouse begins in Jan. 2014.
"We're trying to give customers the opportunity to find coverage in private market as opposed to coming back to Citizens," said Peltier.
Bolt Solutions beat out five other vendors for the contract with Citizens Insurance.
Citizens Renewal Customers will only be able to stay with the insurer of last resort if they can't find cheaper rates elsewhere.