Insurance agents say Citizens pays them too little

Jul 14, 2008

Miami Herald--July 13, 2008


As the largest insurer of homes, condos and apartments in the state, Citizens Property Insurance has nearly 9,000 agents writing policies for the company.

For the agents, Citizens is one of the few companies willing to write homeowners policies, because many private carriers remain skittish about offering coverage in hurricane-prone Florida.

But many agents say the workload isn’t commensurate with the commission rate Citizens pays. In South Florida, agents earn an effective rate that is as much as 50 percent less than what they would receive from private carriers.

The net commission rate on Citizens policies is about 5.5 percent — no commissions are paid on assessments tacked on policies nowadays. Private carriers’ commission rates average about 10 percent. Smaller Florida-based carriers tend to match Citizens’ commission rates.

When it comes to workload, agents point to an upcoming change.

Starting next February, Citizens will introduce new forms for its windstorm policies. For homeowners, the change should be minor. But agents will have to rewrite policies, adding extra information including more specifics on the type of roof, its age and replacement costs.

”You have to birth a watermelon to make it take place,” says Jeff Grady, president of the Florida Association of Independent Agents, referring to the policy change.

The change — three years in the making, says Christine Turner, Citizens’ director of government relations — will create a specific policy for each type of risk Citizens covers and will put all the policies on one computer system.

Notices will begin going out in August to homeowners with windstorm policy renewals beginning Feb. 1.

Citizens has been busy streamlining its day-to-day administration and its underwriting of policies. It is also making an effort to better train its agents.