John Hornbuckle

For years, miles of pristine coastline, mild winters, and yearlong golf have made Florida among the most popular retirement spots in the country. Snowbirds flock to the Sunshine State, often purchasing second homes to live here while family and friends shiver in northern climates.

Recent legislation, however, could have a significant impact on these homeowners, as nearly 80,000 Florida homes could be taken off Citizens Insurance and moved to what are called “surplus line carriers.”

With insurance costs rising, depopulating the state-run insurance carrier has become a priority. However, pushing thousands of homes to surplus line carriers provides a complex set of obstacles that Florida property owners need to be aware of.

Unlike regular insurance companies, surplus line carriers are unregulated by the Office of Insurance Regulation (OIR) and their policies often cover risky properties or luxury items that other insurance companies will not. Now, they’re expanding into the Florida property insurance market.

Surplus line carriers are now allowed to selectively target homes insured by Citizens that are vacant for nine months yearly. This leaves those with vacation homes and or temporary Florida residents at risk, highlighting the importance of consumer advocacy and the crucial role of public adjusters in protecting policyholder rights and ensuring fair insurance settlements.

As president of the Florida Association of Public Insurance Adjusters (FAPIA), I believe all Florida homeowners have the right to understand their insurance options. It is important to know if your “second home” qualifies to be taken out of Citizens. Gather paperwork and calculate your time and tenant’s time at the property. You should also confirm how much you are currently paying for Citizens, as homeowners are only required to accept an offer that is within 20% of what they are paying for Citizens’ coverage.

If you are forced to accept coverage from a surplus line carrier, there are several things I recommend you prepare for and know before you endure a hurricane season or file a claim.

First, the recent legislation requires surplus line carriers to provide “comparable” coverage when you renew your policy. Identify critical numbers in your current policy, like your deductible, judge these against your surplus lines carrier’s coverage to ensure your needs are covered.

Second, the most glaring hole in surplus lines coverage is these carriers are not required to participate in the Florida Insurance Guaranty Association, which pays for damages if your insurer goes insolvent. With a surplus line carrier, homeowners are left unprotected.

Finally, surplus line carriers, being unregulated, may include contract terms not permitted for regulated carriers, such as clauses limiting policyholders’ rights to hire public adjusters. Their lack of regulation also complicates claim disputes, potentially requiring Floridians to travel, even internationally, to address issues. This could mean going as far as New York, Bermuda or London for litigation against these carriers.

If you are the owner of a Florida vacation home or one of our welcomed seasonal residents, I encourage you to ask questions in the event your Citizens policy is eligible for takeout. Being prepared and knowledgeable can save you both on your monthly premium and in the unfortunate case that you are forced to file an insurance claim.

John Hornbuckle is president of the Florida Association of Public Insurance Adjusters’ board of directors. He is a former mayor of Biscayne Park, obtained his public adjuster license in 2011, and is focused on advocacy for insurance consumers.