If you’re an insured with a commercial residential policy issued by Citizens Property Insurance, or if you’re assisting an insured with a claim under one of these policies, it is important to know the answer to the question above. Why? It will make a big difference in terms of which insurance carrier a loss should be report to

Over 2,000 Citizens commercial residential policies, which reportedly represent over $80 million in gross written premiums, were assumed by Heritage Property & Casualty Insurance Company in mid-October of this year. Policyholders affected by the mass assumption should have received an offer of assumption and Opt Out Form from Heritage Property at least 30-days before the effective date and a follow up letter from Citizens explaining the effect of this assumption.1 If this letter is thrown out or not responded to within a certain amount of time, then the commercial residential policy will automatically be “taken out” by Heritage Property – whether the policyholder knows it or not.

Though some general information about the assumption process is available online at both the  Heritage Insurance and Citizens websites, it is important that you read the insurance carriers’ letters carefully and understand the effect of the assumption. For example, if the date of loss occurs on or after the assumption date, then the loss should be reported to Heritage Insurance’s Claims Department – not Citizens. The notice letter should also explain one’s option to “opt out” from the assumption, including the deadline for signing and retuning an Opt Out Request Form and the address this form should be sent to.

Heritage Property is just one of several “take-out” companies approved by the Florida Office of Insurance Regulation to assume insurance policies from Citizens as part of the Citizens Depopulation Program. As you can probably imagine, the program is not without its flaws. Policyholders and public adjusters who serve on behalf of policyholders have encountered several, rather unique, issues as a result of the assumption process. These include situations where the take-out company fails to notify the insured of the assumption, the effect (if any) of an insured submitting an Opt Out Form after the stated deadline, and what should happen if a loss is inadvertently reported to the wrong insurer.

If you’re assisting an insured with a loss under a Citizens residential commercial policy that occurred around the time of this mass assumption – even if you believe an opt out request was submitted – you may want to contact both Citizens and Heritage Property. They will be able to verify who the claim should be reported to and provide a copy of the assumption notice and signed Opt Out Form, if applicable. It might even be a good idea to confirm this information in writing, in case one carrier later claims that the loss should have been reported to the other. While one would think an insurance carrier would let you know that you reported the claim to the wrong insurer, unfortunately, that may not always be the case.

1 Florida Office of Insurance Regulation, Take Out Companies – Consumers/Citizens Policyholders/Agents. (http://www.floir.com/Sections/PandC/TakeoutConsumers.aspx)