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Citizens offers 31 proposals to reduce exposure, coverage (p2)

We are continuing our discussion of proposals presented to Florida's governor and other lawmakers by Citizens Property Insurance Co. The governor directed the insurer several weeks ago to devise a plan that would improve its viability -- and not just any plan, but a plan that did not involve legislative action.

The presentation laid out 31 proposals, most of which involved cutting coverage for policyholders. In our last post, we talked about the company's plans to lower limits on high-value homes and to increase deductibles for sinkhole coverage, among others.

Homeowners may be confused by a proposed exclusion. Citizens will no longer cover structures beyond the main residence that are not built out of the same material as the residence. If you have a brick patio off the back of your stucco home, the patio will probably not be covered. The company indicated that it meant to take patios, pool enclosures, carports, screen porches and so on off the table for homeowner insurance.

If your small laundry room has a vinyl floor, and the rest of your house has hardwood floors, a Citizens policy will only cover the first $10,000 of damage to the laundry room floor. The company set the threshold at the smaller space comprising no more than 5 percent of the home's total square footage.

One proposal involves a type of coverage that homeowners seldom know about. Most standard homeowner policies, in fact, don't include it. It is law and ordinance coverage.

What is law and ordinance coverage? We'll explain in our next post.

Source: Insurance Journal, "Florida's Citizens Insurance Says Legislation Needed for Real Change," Michael Adams, Dec. 6, 2011

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