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Date of Issue: March 22, 2007

Insurance: Refunds from Citizens trickling down to Islanders

deffenbaugh pic
Both Holmes Beach Commissioner David Zaccagnino and his 5-year-old daughter, Sela, are all smiles following Saturday’s St. Patrick’s Day parade in Homes Beach. But a $95 refund from Citizens Insurance prompted uncertainty. “Very confusing,” he said. Islander Photo: Molly McCartney

Some of the long-awaited insurance rate refunds are beginning to trickle down to Anna Maria Island.

But the emphasis so far is on trickle.

Holmes Beach Commissioner David Zaccagnino got a partial refund a few days ago on the $2,010 wind insurance policy he bought from Citizens Property Insurance Corp. in January.

That was the good news. The bad news?

The refund was only $95.

"This is all very confusing," said Zaccagnino, an Island homeowner for seven years and a member of the city commission since 2005.

It was also disappointing, he said, given the recent efforts by Gov. Charlie Crist and the Florida Legislature to pass a massive new insurance law aimed at reducing premiums and making coverage more available, especially in hard-hit areas like Anna Maria Island.

Zaccagnino was in the group of local officials who met with Crist on Friday during the governor’s whirlwind visit to Manatee County. "I told him he was doing a good job," Zaccagnino said. But he didn’t try to tell Crist about his personal experience with property insurance.

Zaccagnino paid $1,339 last year for his Citizens wind policy. But the same coverage cost him $2,010 when he renewed the policy on Jan. 7. The increase is a 50 percent increase over his 2006 premium.

Thanks to the $95 refund, his premium increase is $576 rather than $671.

His refund check arrived only a few days before Citizens announced that rate decreases and some rate refunds were on the way to its 1.2 million policyholders. The announcement made front-page headlines in many newspapers.

Even then it was not clear how much an individual might save.

In response to questions from The Islander, Citizens spokesman Rocky Scott said that Zaccagnino’s wind premium of $2,010 contained two rate increases.

Since Zaccagnino had no way of knowing what his new premium might be until it arrived in his mail box, the insurance rate process can be a guessing game, at least for the policyholder.

Here is a breakdown provided by Scott of the rate hikes that were responsible for the 50 percent jump in Zaccagnino’s wind premium.

The first premium increase was imposed last year and pushed his rate to $1,915, up from the $1,339 he paid in 2006.

The second rate hike, imposed Jan. 1, pushed the premium up to $2,010.

Scott said that the Florida Legislature, meeting in special session in January, rolled back Citizens rates to the levels that were in place on Dec. 31, 2006.

The effect of the rollback was to reduce Zaccagnino’s premium to $1,915, he said. That triggered the $95 refund check that he received earlier this month.

Without the rollback, Zaccagnino’s premium for this year would have remained at $2,010 and there would have been no refund check.

The rollback also eliminated the rate hike that Citizens had intended to impose this month. The rate hike proposed for Manatee County high-risk policyholders like Zaccagnino, who lives one block from the Gulf of Mexico, would have meant an average increase of 73 percent and would have pushed his annual premium up to about $3,500 upon renewal in 2008.

The Citizens spokesman sees the possibility for Zaccagnino to get lower rates later this year on his wind policy because of the savings that Citizens expects to get from its expanded access to reinsurance from the Florida Hurricane Catastrophe Fund.

When those reinsurance calculations are completed, "rates will come down and refunds will go out accordingly," Scott said.

He said Zaccagnino might get a second refund this year, in addition to the $95 he has already received, although it isn’t clear how much the second refund might be.

Spokesman Scott said Zaccagnino was apparently in the first group of Citizens wind-only policyholders to get refunds. A second round of refunds began to go out in mid-March to policyholders who have homeowner’s coverage with Citizens, he said.

 The refunds that Citizens sends out and the premium reductions that are imposed will vary, depending on the kind of insurance, the location of the property and various other factors.

Scott said that June 1 is the scheduled kickoff date for Citizens to begin selling wind coverage for commercial property outside the state-designated wind zone.

This represents a major shift in the operation of Citizens. In the past, small businesses outside the wind zone have been unable to obtain Citizens wind coverage. Some commercial properties - including some churches - that were not eligible for Citizens and could not find affordable wind insurance elsewhere in the market have opted to go bare.

"What we sell will be insurance for the first $1 million in coverage on a commercial structure with a value of up to $10 million," Scott said. The commercial property owner will have to go to the private market for coverage above the $1 million mark.


Select cancellations

While Zaccagnino was trying to figure out why his Citizens refund seemed smaller than recent announcements suggested it might be, the postman delivered another insurance surprise.

It was a cancellation notice from Florida Select Insurance Company, which has been insuring Zaccagnino’s home against fire and other perils.

The cancellation notice was sent out one day after Florida Select received his $1,081 annual premium payment.

What is going on here?

"I am clueless," Zaccagnino said.

He said his insurance agent is looking for a homeowner’s policy to replace his Florida Select coverage.

Zaccagnino said he expects to have to pay for a new policy while waiting to see if the agent can get him a refund from Florida Select.

According to a notice on the Web site of the Florida Department of Financial Services, Florida Select Insurance Company was ordered into receivership on June 30, 2006.

"The receivership process is similar to bankruptcy," the notice said. It also said the "hazardous condition of the company does not allow the receiver to continue your coverage through Florida Select."

Zaccagnino said that his flood insurance policy so far appears to be only slightly more expensive than last year. His annual premium is now $1,174, compared to $1,129 last year.

In January, he paid a total of $4,265 to renew the flood, wind and homeowners policies. The $95 refund reduced his home insurance to $4,170.

Now if he can just get coverage on his 2,100-square-foot home to protect it against fire and other perils.


Premium correction

Anna Maria homeowner Mary Manion said that her annual premium for insurance with Universal Property and Casualty is $2,200, rather than the $1,300 reported here last week. She switched to Universal after canceling her policy with USF&G.

Note: If you have a story to share about your experience with insurance rate hikes, rate reductions, rate refunds or other insurance issues, please send a note to The Islander by e-mailing