Florida’s Largest Insurer Rapidly Cuts Policies

Citizens Property Insurance, Florida’s insurer of last resort, has dropped tens of thousands of policies in the past week alone as it continues its depopulation efforts to stabilize the Sunshine State’s shaky sector. Over the week ending December 20, the not-for-profit company dropped its policy count from 982,892 to 935,948, getting closer to its goal of reaching a total of 900,000 policies by the end of the year, according to new data published on Citizens’ website. Newsweek contacted Citizens and the Insurance Information Institute (Triple-I) for comment by email early on Monday. Why It Matters Florida’s insurer of last resort, which offers policies to those unable to obtain them in the traditional market, has grown massively in the past few years as private insurers cut coverage across the state or withdrew from it entirely. Aerial view of destroyed houses in Port St Lucie after a tornado hit the area and caused severe damage as Hurricane Milton swept through Florida on October 11, 2024. Citizens has dropped tens of thousands… Aerial view of destroyed houses in Port St Lucie after a tornado hit the area and caused severe damage as Hurricane Milton swept through Florida on October 11, 2024. Citizens has dropped tens of thousands of policies in December as it tries to reach its goal of a total policy count of 900k by the end of the year. MIGUEL J. RODRIGUEZ CARRILLO/AFP via Getty Images By fall 2023, Citizens counted a total of over 1.4 million policies, a record that concerned legislators in the state. While Citizens is funded by policyholder premiums, Florida law requires that the company levy assessments on most of the state’s policyholders should it experience a deficit following a particularly devastating extreme weather event. That means that the state, potentially, is only one very bad storm away from seeing its homeowners insurance market be completely upended. That is, unless more is done to stabilize the sector—including depopulating Citizens and encouraging private insurers to stay in the market. What To Know Since reaching a peak in the number of policyholders in the fall of 2023 and becoming Florida’s largest property insurance provider, Citizens has been trying to drop off policies, matching policyholders with fiscally sound private insurers. While by September 30 Citizens still counted a total of 1,263,055 policies in force, the company has recently sped up its depopulation efforts in view of reaching its goal of 900,000 policies by the end of 2024. The latest monthly policy count shows that, as of November 30, Citizens had a total of 988,051 policies in force—a steep drop compared to two months earlier. The company is still 35,948 policies away from its 2024 goal. What People Are Saying Triple-I director Mark Friedlander, in an interview with NPR in July, said that Citizens still had “a long way to go” before ending its depopulation efforts and reaching manageable risk levels. “And if we continue to see such a large gap in costs between Citizens and the private market, it’s going to take much longer.” For a policy transfer from Citizens to a private insurer to be approved, surplus line carriers’ offer must be within 20 percent of the cost of the state’s insurer of last resort. In June, Citizens’ Board of Governors backed a proposal to increase its rate by an average of 13.5 percent for its most common type of policy. What’s Next Additional rounds of depopulation efforts are planned for February and March 2025, as Citizens tries to slim its total policy count further. These should help stabilize the Florida homeowners insurance market, which has suffered from a combination of increased risk posed by climate, widespread fraud and excessive litigation. However, the state is far from out of the ongoing crisis—especially as the threat posed by climate change is bound to grow in the future. The rising cost of insurance in the state and the limited availability of coverage are expected to be a topic of discussion for lawmakers in Tallahassee next year.