Last in a series

Hundreds of thousands of Floridians still hold property insurance coverage from State Farm Florida. However, their trips to the mail box might be especially tense following the Jan. 27 announcement that the insurance giant plans to stop writing property insurance in the state.

Some policyholders already have gotten a letter informing them they've been canceled. Others already have been dropped. So now what?

To borrow from the great Smokey Robinson and Berry Gordy: 'You better shop around.'

Florida Office of Insurance Regulation (FLOIR) spokesman Ed Domansky echoed the hook from that hit oldies song during a recent conversation with Gulf Breeze News. Late last week, Domansky's office continued its statewide public-relations offensive to get the word out with a release aimed at both the media and the public. The FLOIR has added a red-highlighted link to its Web site's main page with "important information about time lines."

In a nutshell, the statement reiterates what Gulf Breeze News has reported in the past two weeks: State Farm Florida must give policyholders a 180- day "heads up" notice "before their policies are non-renewed."

FLOIR officials urge consumers to pay special attention to highlighted items on the agency's Web site - a red box marked "advisory" - that takes consumers to another list and two blue-links reading "shop and compare rates" and "Florida Market Assistance Plan."

The first - shop and compare rates - gives Floridians an idea what their homes might cost to insure compared to other houses of comparable value.

The second - Florida Market Assistance Plan - allows consumers to register in a stateapproved data base designed to match insurance companies with property holders seeking coverage. The FMAP site offers potential clients prompts on how to register and what to expect.

Caution: The site explains that individual companies can take up to 30 days to contact property owners they might be a match for coverage. At the same time, it warns consumers shopping around that there is no guarantee everyone who registers will find suitable coverage on FMAP's site.

Ultimately - FLOIR officials advise - your best bet as a property owner needing to bridge the coverage gap between State Farm Florida and a new insurer is:

Do not wait until the last minute;

Seek the advice of an independent insurance broker or your current State Farm Florida representative.

As Gulf Breeze News reported last week, State Farm Florida brokers cannot write insurance on any other company except for the state-mandated Citizens Property Insurance Corp., but State Farm agents can and should direct current clients to other, independent brokers.

Many property owners might find themselves turning to Citizens Property Insurance - created by the Florida legislature in 2002.

Some see the prospect of Citizens' rolls increasing as bad news for Florida. Polk County Commissioner Bob English told Gulf Breeze News recently he foresaw a "train wreck" ahead if Citizens became the state's leading insurance provider, his argument being that Citizens was "underfunded."

In the event of another catastrophic storm, "It would leave a terrible exposure to the state," English said.

Despite claims by State Farm Florida, Citizens Property Insurance Corp. - with just under 1.1 million Floridians insured - already has become the state's largest property insurer. State Farm cites 1.2 million policies, but only 800,000 actually cover real estate holdings such as homes and businesses.

Like FLOIR spokesman Domansky, Citizens' John Kuczwanski urges customers to shop around now and calls Citizens "the insurer of last resort." As for fears of doom and gloom of Citizens increasing its coverage base, Kuczwanski told Gulf Breeze News otherwise. Citizens, he said, has cash reserves approaching $6 billion and "is in the best financial situation since 2002."

According to Kuczwanski, "We have the ability to assess policyholders up to 15 percent per account ... to recoup any shortfalls."

If that initial assessment is insufficient, state law provides for an emergency assessment that would spread the shortfall across the state to payments for auto tags and boat licenses, for instance.

Just because a policyholder winds up with Citizens doesn't mean he or she won't eventually be covered by a private insurer in the future.

That's the way the system was designed. Kuczwanski calls it a "depopulation process" in which the Citizens policy base is made available to outside insurers in a "concerted effort to get private companies to take policies from Citizens."

Newer companies in the property insurance pool - some 25 or more according to state estimates - currently insure fewer than 200,000 customers to "spread the risk." What's protecting consumers in the event any of these companies run into trouble down the road?

Kuczwanski cites something called FIGA - Florida Insurance Guaranty Association, a nonprofit agency created by the Florida Legislature in 1970 to handle the claims of insolvent property and casualty insurance companies. Think of it as an FDIC for underwriting.

"Ten or 20 years ago, our parents went to insurance agents and took care of their insurance needs with one stop," says Kuczwanski. "In a perfect world, we understand we would not be here. Until that ideal world comes along, Citizens will be here."

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