Citizens Property Insurance, cursed and dreaded since its inception, is becoming the lowest-cost coverage option for some homeowners.
The massive insurance reform bill that was passed last month allows homeowners covered by a private carrier to opt into Citizens if they're paying rates 25 percent higher than what the state-run insurer charges.
And, under a ruling last fall that's now in the law, Citizens customers don't have to leave if they receive a notice transferring coverage to a private insurer that wants to hit them with a 25 percent or higher increase.
Steven Tate of Palmetto Bay, a Florida Peninsula policyholder, got a notice that his premium would jump from $3,200 to $9,000. Mitigation credits could save Tate about $2,000, but he already has two agents shopping Citizens for him.
''I'm sure there are a lot of people in the same situation as I am, who can't pay this kind of money for insurance,'' Tate said.
Citizens could end up with 700,000 more policies, according to the Office of Insurance Regulation, and agents all over Broward and Miami-Dade are fielding queries like Tate's.
Gov. Charlie Crist was so adamant that the Citizens option be given to more policyholders that excluding that provision could have killed the insurance bill.
The 25 percent rate threshold, which the governor opposed, was passed as a compromise because some lawmakers were concerned about what a surge of new policies would do to Citizens operations.
''My indigestion with expanding Citizens has to do more with its quality of service than with its ability to lower rates,'' says Rep. Dan Gelber, a Democrat from Miami Beach and House minority leader. He noted that Citizens was besieged with complaints about poor claims handling after the four 2004 storms.
Based on data from the insurance department, six companies have approved rates that on average are at least 25 percent higher than Citizens.
Eight other companies with rates at least 25 percent higher than Citizens -- many of them at first formed solely to take Citizens policies -- took advantage of a state law that allows insurers to begin charging a higher rate and then file for regulatory approval. If the increases are rejected entirely or partially, homeowners would be due a refund.
Since a ruling last fall, Citizens policyholders who got takeout offers from these firms could refuse to leave Citizens if the rates were 25 percent above what the state-run company was charging. The new law lets policyholders continue to do that and also lets anyone whose rates have climbed beyond the 25 percent-higher mark to join Citizens.
''It's a bit of a sea change'' for Citizens, says Bob Lotane, an insurance department spokesman, noting that Citizens is no longer just the insurer of last resort.
Indeed, the new legislation drops the requirement that Citizens peg its rates above the average charged by the 20 largest private insurers in the state.
Citizens also will be able to sell an entire policy, including windstorm, fire, theft and liability to homeowners in the state's designated wind-pool area (generally east of I-95 and U.S. 1 in South Florida). The company must submit a business plan to state officials before it may proceed with that.
Citizens officials say the insurer will be able to handle the heavier policy load.
''Would this be an unexpected hardship? Hardly,'' said Citizens spokesman Rocky Scott. ``If they all came crashing in at one time, that would give us a problem. But policies renew once a year.''
Citizens officials say they don't expect every policyholder to take the option. For one thing, some homeowners prefer to bundle auto, home, life and health insurance with one firm.
As it now stands, Citizens processed 55,000 new policies in January -- just under 14,000 a week. In January 2006, the company lost 32,000 policies.
In the past 12 months, Citizens' exposure has doubled to $418 billion from $209 billion. And with 1.3 million policies on its books, Citizens now stands as the largest insurer of homes and condos in Florida. State Farm Insurance, with a million policies, is the largest private insurer.
Despite changes to Citizens operations brought about by the reform bill, agents realize a state-run insurance pool isn't the sole answer to Florida's insurance crisis.
Dulce Suarez-Resnick, an agent with HBA Insurance Group in Miami, said the just-passed ''Band-Aid legislation'' addresses affordability, but it does little about availability.
``How do we get these national companies, A-rated admitted carriers, back in the game? I haven't heard a word from any of them. Have you?''