With hurricane season only about 60 days away, some homeowners may be scrambling to either update their insurance coverage or purchase protection in case of a storm.
But be careful, especially if a company other than government-run Citizens Property Insurance Corporation offers a package that promises an enticing comprehensive package.
If it sounds too good to be true, it probably is.
Just ask Bob Kanner, former Spring Hill Fire Rescue District Commissioner and now deputy chief of the High Point Volunteer Fire Department.
Kanner found himself in a perfect storm of problems with a private insurer and is scrambling to right the boat and return to Citizens.
Although Citizens’ problems are well-documented, it is still one of the only companies with the money to back up claims and offer the protection needed, says State Rep. Mike Fasano, R-New Port Richey.
Fasano no longer represents Hernando County but the legislator says he gets calls almost daily from residents here, especially in Timber Pines, complaining of insurance-related problems related to sinkhole and other claims.
He has also agreed to go to bat for Kanner.
“Kanner is a perfect example of what goes on when you get passed around like you’re a foster child,” Fasano said.
Kanner believes people may not have the protection they think they have should a hurricane barrel down on Hernando County and says he is fighting the good fight – not only for himself – but his fellow Hernando Countians.
“Someone needs to put a stop to this type of behavior – the people of the state of Florida deserve better.”
One day after Hernando Today investigated Kanner’s plight, a consultant to American Integrity acknowledged there was confusion in the communication process and the company intends to honor his coverage.
Kanner, who lives in Royal Highlands, says he will decide soon whether to stay with American Integrity after the recent hassles or try and return to Citizens.
For Kanner, it began last November, when he received a letter from a private insurer called American Integrity Insurance Company of Florida inviting him to break from Citizens and come onboard with the new company.
Kanner said the letter spelled out the terms and found the package attractive for two reasons: it promised coverage on screen porches and the maximum liability, at $300,000, was higher than Citizens. His premium was $45-per-year higher worth it, he said, for the extra coverage.
Kanner figures if a hurricane damaged his screened porch, he would be out about $5,000 to $7,000. His birdcage porch is attached via a sliding door in the back and is roughly 24-foot wide by 26-foot long.
Kanner did not keep that initial letter, an oversight he would later regret.
He later signed the appropriate paperwork and his home and porch were now covered by American Integrity. Or so he thought.
On Feb. 14, on Valentine’s Day, Kanner received his policy in the mail.
It was his policy and it contained something that made Kanner do a double take. It said that screened enclosures were not covered.
Kanner called American Integrity and a representative told him that the original letter promising screened porch coverage was in error.
Kanner said he tried to go back to Citizens but American Integrity told it was too late because he was already tied in with that company.
Then Kanner was hit by another whammy.
American Integrity told him it should not have entered into a contract him to begin with because he filed a sinkhole claim two years ago and is now threatening to cancel his coverage.
Kanner told the company that the claim was unfounded and no sinkhole was found. But it made no difference, a representative told him, and his coverage will end in April 2014.
Laura Miller, a senior customer correspondence specialist with Citizens, cited in an email to Kanner a sample letter sent out by American Integrity that indicates the company provides coverage for “certain other structures, such as screened enclosures and gazebos.”
“Please accept my apologies for the possible misinformation that was presented to you by American Integrity,” Miller wrote Kanner.
Kanner has filed a report with the Florida Department of Financial Services, which followed up with a letter stating that it has contacted American Integrity, is awaiting a response and will take up to 30 days to review the matter.
He also called Fasano, who has championed victims of sinkholes in his long political career.
Fasano said Kanner’s plight is indicative of thousands of people who have had problems with what he calls these “take-out” insurers. He has agreed to help Kanner and urges homeowners to be careful if solicited in the mail.
Fasano said people must be wary when switching to private insurers who promise the moon and advises prior research before signing any documents switching coverage from Citizens.
“Don’t just take it for granted you’re getting a policy that is giving you everything you went when in fact you’re not,” he said.
Fasano said he has had problems with Citizens but at least it is financially viable to protect customers should a claim arise.
Many of these private insurers, he said, don’t have the financial stability to do so and eventually wind up hiking premiums despite initial low rates.
“Unless there is an absolute desire to go to a different company, I urge them to stay where they’re at,” Fasano said. “They are small, have few resources and there is no guarantee they’re not going to drop you or that the premiums will not go up.”
Lisa Miller, former insurance regulator and now consultant to American Integrity, said in an email to Hernando Today that Kanner’s issues have been resolved.
“Mr. Kanner was correct that our communication was confusing about screen enclosure coverage and therefore we are providing this coverage through his next policy renewal date in 2014 at no charge. This actually is better coverage than what he would receive from Citizens for the next 12 months.
“American Integrity takes care of its customers — period!” she said.
The company has no intention of dropping him because of the sinkhole claim, she said.
Miller added that most Florida-based insurance companies have stronger re-insurance programs than Citizens.
“Policyholders of private insurance companies are not subject to assessments which are a tax that will be levied when the time comes for Citizens to raise funds to cover any shortfalls it may have,” she said.
“Citizens has over 1 million policies and billions of dollars of risk, with only a fraction to that risk covered by re-insurance,” she said. “By any stretch of imagination that scenario cannot be as manageable as private companies like American Integrity with a smaller number of policies and more adequate reinsurance to meet their promises to their policyholders.”
In a prepared statement, the Florida Office of Insurance Regulation (FOIR) said that take-out insurance companies “have all met or exceeded Florida's rigorous statutory requirements to attain a license…to sell property insurance in the state.”
Policyholders receive a letter from the take-out company letting them know their policy has been selected for removal from Citizens, according to FOIR.
The policyholders are requested to send an email or return a portion of the letter if they want to refuse the offer and stay in Citizens. Non-homestead policyholders particularly have a higher assessment risk with Citizens than in the voluntary market. Therefore, most policyholders who receive such an offer will accept it.
Meanwhile, Kanner said he is thankful for Fasano’s help.
“It’s an honor to have Mike Fasano on my side, even though I don’t live in his district,” he said. “I wish we had more politicians out there like Mike who are willing to help when the citizens of Florida are getting scammed,” Kanner said.
Kanner said he now has to weigh his options as to staying with American Integrity or going back to Citizens.
“It’s nice they’re (American Integrity) is going to go along and honor what they originally told me they were going to do,” he said. “It’s my opinion the only reason they’re doing this is because I got a state representative and the newspaper involved.”
To view the financial stability of American Integrity and other take-out companies, visit the Florida Office of Insurance Regulation’s website at http://www.floir.com/Sections/PandC/TakeoutCompanies.aspx