Just before the start of the 2014 Hurricane Season, People’s Trust Insurance Company, an unorthodox company, is now pulling insurance away from thousands. Last year, the company was awarded the 2013 Governor’s Innovators in Business Award for being a company that has set a standard for entrepreneurship and creativity. But this year, People’s has turned its back on many homeowners, leaving them scrambling for insurance.
Since its inception, the business plan of People’s Trust has been to have its affiliated construction company repair damaged homes instead of paying policyholders to fix the damage. This manner of handling property damage has been found by many Florida homeowners to be an awful experience. People’s Trust has creatively found a way to skate out on paying valid insurance claims and has done repair jobs that a few clicks on the web will show a catalogue of complaints from policyholders who have had nightmare experiences dealing with Rapid Response Team and their attempt to “fix” problems. Or, as some of my clients have experienced, complete denials of insurance proceeds in cases where the repair company’s actions did not equate to a big profit.
Florida is a large state and for the past year or so People’s Trust has been pumping large funds into marketing all across the state with hopes that people will fall for the mailer images that tug on the heartstrings, and buy a discounted policy that offers little protection. People’s Trust has relied on teddy bears and cute children models (this month’s flyer is a baby eating cake) to lure in Floridians who are hoping for a solution to their insurance woes. Some homeowners changed to People’s Trust because the advertisements promise something that every Floridian is looking for…a way to save on what can be extremely hard to find – homeowner’s insurance. Many Floridians have been hoping for more competition in the property insurance world so they can have a choice of carriers and not just be “stuck with Citizens.” But now many of those same homeowners who were mailed giant, glossy banners that looked like a life raft have had their policies canceled.
Charles Elmore, of The Palm Beach Post, has been doing a fantastic job covering the actions of People’s Trust these past few weeks. You should also check out his coverage on Citizens Property Insurance Corporation. Earlier this month, Elmore reported that People’s Trust was canceling thousands of new policies in South Florida during the first 90 days of a new policy. The cancellations happened just a few months after People’s Trust founder, Michael (Mike) Gold, passed away in January. Gold was 60 years old and was reported to have died in his sleep. I remember sitting at the WIND Conference when I heard that Mr. Gold had passed. Knowing that People’s Trust was his brain child, I was sure that the company would make some changes. The company had been sending giant glassy ads to my mailbox, but ads tapered off in my neighborhood for a short time. Now they are back.
As evidenced by the cancellation notices to thousands of policyholders, there must have been major executive decisions made in March. It has now been reported that People’s Trust is not writing new policies in Dade, Broward, or Palm Beach County. People’s Trust has also transferred its headquarters from Boca Raton to Deerfield Beach.
The company’s director of marketing, someone likely in charge of the mass mailing and heavy advertising for the company, has to have a count on how many Floridians have been targeted by the company this year, yet Genie O’Loughlin says the company is being prudent in their risk portfolio now that the 2014 storm season is here. Seriously? Hurricane seasons comes every June. What was this company thinking!? The company calls it “prudent exposure management strategies to more effectively diversify and balance the company’s risk portfolio as we enter the 2014 storm season.” I question, whether someone finally recognized that the way claims are being handled by Rapid Response Team is falling short, and the model of repairing all homes itself won’t be possible when the amount of damage increases and the frequency of claims rise? Or did they know this all along?
Many policyholders are also questioning whether the cancellation notices, coming so close to the start of hurricane season, are proper under Florida’s law, and now they are searching to find new insurance at astronomical rates.