Citizens Property Insurance Corporation (What is property insurance)
December 7th, 2008
International insurance and financial services organization serving commercial, institutional, and individual customers.
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Citizens Property Insurance Corporation was created by the Florida Legislature in 2002. The purpose of forming Citizens Property Insurance Corporation was to provide insurance coverage for homeowners in Florida, especially those in high-risk areas.
Citizens Property Insurance Corporation is the off-shoot of a merger between two state-run insurance entities. These two companies that make up Citizens Property Insurance Corporation are the Florida Residential Property and Casualty Joint Underwriting Association 9FRPCJUA) and the Florida Windstorm Underwriting Association (FWUA).
Citizens Property Insurance Corporation provided the kind of coverage that high-risk homeowners need. Before Citizens Property Insurance Corporation, Florida homeowners had trouble finding an insurance company willing to fund for the cost of their damages. With Citizens Property Insurance Corporation, Florida homeowners are looking at coverage that could reach up to $350,000. This amount which Citizens Property Insurance Corporation is willing to provide covers the costs of damages, repair, and rebuilding. In addition, Citizens Property Insurance Corporation also pays for reconstruction of structures outside the house such as fences, swimming pools, and the like. Replacement costs for lost or damaged items are also included in the coverage that Citizens Property Insurance Corporation provides.
Recently though, Citizens Property Insurance Corporation is experiencing a squeeze in its budget. Four hurricanes – Charley, Ivan, Jeanne, and Frances – devastated Florida. On July 28, 2004, Citizens Property
Insurance is essentially a contract between the insurer and policy owner. Insurer agrees to pay an amount to the person insured or his nominee at any unfortunate event (according to the policy) or at the date or maturity or at death of the policy owner. Policy owner has to pay a fixed amount called premium in periodic intervals (monthly, quarterly, half yearly or yearly). Premium amount varies depends on many factors like age of the policy owner, scheme, type of the policy, sum assured etc.
Insurance Corporation estimated about 78,257 insurance claims for damages wrought by the four hurricanes.
According to Risk Management Solutions, an independent organization that assesses disaster damages, Citizens Property Insurance Corporation faces total damages worth $1.77 billion. Contrary to what Citizens Property Insurance Corporation released in late July, Risk Management Solutions found that the number of claims reaches almost 92,000. Citizens Property Insurance Corporation also faces the challenge of even higher claims within the next few months.
Citizens Property Insurance Corporation suffers $252 million in damages in their wind-only policies for High-Risk Accounts from Hurricane Jeanne. The estimated loss from the same hurricane for the Personal Lines Accounts of Citizens Property Insurance Corporation is $53 million. Citizens Property Insurance Corporation experienced somewhat lesser deficit from Hurricane Jeanne in their Commercial Lines Account with only $27 million to grapple with.
I trust that what you’ve read so far has been informative. The following section should go a long way toward clearing up any uncertainty that may remain.
Hurricane Ivan costs less for Citizens Property Insurance Corporation in damages. The High Risk Accounts of Citizens Property Insurance Corporation, the former Florida WUA, only costs $220 million, a somewhat lower number compared to Hurricane Jeanne. Citizens Property Insurance Corporation estimates a total loss of $12 million from Hurricane Ivan for both their
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Personal and Commercial Lines Accounts.
Citizens Property Insurance Corporation estimates spending $225 million worth of coverage for damages and loss caused by Hurricane Frances. For the residential multi-peril policies of Citizens Property Insurance Corporation, the amount reaches up to $50 million. Citizens Property Insurance Corporation also expects to spend an additional $15 million in commercial residential policies from the same hurricane.
Citizens Property Insurance Corporation projects a loss worth $850 million from Hurricane Charley for their wind-only High-Risk Account policies. For the Personal Lines Accounts, Citizens Property Insurance Corporation sees spending around $60 million. An additional $15 million from Citizens Property Insurance Corporation is also needed to cover their Commercial Lines Accounts. All in all, Hurricane Charley costs Citizens Property Insurance Corporation an astounding $925 million.
Citizens Property Insurance Corporation is no doubt facing a peril of going into deficit. If Citizens Property Insurance Corporation, the company will be forced to assess other insurance companies in order to cover all claims.
That’s how things stand right now. Keep in mind that any subject can change over time, so be sure you keep up with the latest news.
Entry Filed under: Property Insurance
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