Florida’s most used home insurance company Citizens announced it will begin shedding plans next week. Although more Floridians use Citizens than any other insurance provider at 1.171 million, it’s not a choice as those property owners are unable to buy policies elsewhere.
Legislation is working through the Florida Legislature to reduce its rolls even further by limiting second homes that would be eligible for Citizens. Gov Ron DeSantis told CNBC earlier this year that Citizens is “not solvent” drawing into question whether the insurer would be able to do its job in the event of a major storm, Florida Politics reported.
Last year, Citizens jumped into the top 10 property insurers nationally. Data from S&P Global shows Citizens grew over 65% in a single year as more and more Florida homeowners found themselves unable to buy policies elsewhere.
Average home insurance costs in Florida total $4,218 a year, over $1,400 more than the national average of $2,777, putting more pressure on the insurer of last resort. Natural disasters like tropical storms and hurricanes along with inflation have combined to drive property insurance costs up as high as 70% in Florida, according to S&P Global Market Intelligence.
Created as an insurer of last resort, Citizens in recent years has outpaced every other provider in Florida, where customers found themselves dropped from their insurance companies or completely priced out.
Citizens has also been actively working through its “depopulation program,” a way of moving policyholders onto private insurers. At its peak, Citizens held a massive 1.412 million policies in Florida last year, shedding nearly 300,000 policies since its record numbers last September, the provider reported.
Total policies issued by the company fluctuate based on eligibility and could fluctuate further depending on the ramifications of the new legislation being considered.
Slide Insurance Co., Florida Peninsula Insurance Co., Edison Insurance Co., Southern Oak Insurance Co., American Traditions Insurance Co. and People’s Trust Insurance Co. — have received approval to assume Citizens policies next week, according to the state Office of Insurance Regulation website.
Property owners who receive depopulation notices are those who Citizens has determined may no longer be eligible for the policies they provide.
What is Citizens insurance?
Citizens Property Insurance Corporation is a nonprofit created by the state of Florida as a response to hurricanes and tropical storms driving up the price of home insurance in the state.Although run like a private corporation, Citizens has an oversight panel made up of the governor, chief financial officer, attorney general and commissioner of agriculture.
When was Citizens insurance established?
In 2002, the Florida legislature created Citizens as a “not-for-profit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market,” according to the Citizens website.
How to get Citizens homeowners insurance
Citizens insurance is not available to everyone. Only those who are unable to purchase a policy from any other provider and those who have been priced out of the private market are eligible for insurance.
Homeowners can buy into Citizens as a last resort due to cost if the next cheapest plan for the same coverage is 20% higher or more.
