Citizens Insurance Customers in Tampa Bay: Brace for Higher Premiums
Despite Gov. Ron DeSantis’s recent statements about reduced insurance premiums, homeowners in the Tampa Bay area covered by Citizens Property Insurance Corp. are likely facing a different reality. Customers can expect to see a rise in their premiums, adding to the financial burdens of property ownership.
At a February news conference, DeSantis highlighted that approximately 20% of Citizens policyholders across the state would see their premiums decrease, with most of the relief concentrated in South Florida. However, these savings won’t translate to the Tampa Bay area.
The majority of the almost one million policyholders statewide will pay more starting June 1. The rate increases will be widespread in Tampa Bay. Most homeowners will see their insurance costs rise by several hundred dollars.
Citizens is the state-run insurer of last resort in Florida, created to provide coverage for property owners who can’t secure it in the private market.
In Tampa Bay, 98% of the over 147,000 homeowners using Citizens’ most common insurance policy for single-family homes will experience rate hikes. This represents a considerable impact on residents throughout the area.
The average premium for these policies will surge by 13% in Hillsborough and Pasco counties, and by 12% in Pinellas. This translates to an average increase of over $300 in both Hillsborough and Pinellas counties, and a $295 increase in Pasco county.
An aerial view of Fishhawk Ranch, shows rooftops, on April 6, 2021.
Even with the approved increases, policies covered by Citizens’ rates are still lower than they would have been had the Florida Office of Insurance Regulation approved the company’s initial rate increase request. In June 2024, Citizens requested an average 13.5% rate increase for single-family homeowners, but regulators slashed the proposal to 6.6%.
Citizens spokesperson Michael Peltier explained that the rate increases were necessary because its rates are not “actuarially sound.” This means they aren’t adequate to cover expected losses. The state sets the soundness level for Citizens, and their average rates would need to rise 55% to meet this criterion.
Citizens was designed to function as a safety net for homeowners struggling in the private market, not as an economical option for all. However, state policy also restricts how quickly Citizens can raise its rates.
Compared to the private insurance market, Citizens has not increased rates as rapidly. Over the past five years, average Citizens premiums have increased by 30%, whereas, during the same period, private insurers’ premiums have doubled.
Divya Sangam, an insurance expert and spokesperson for LendingTree, noted that Citizens is now the leading insurer in Florida. Six years ago, Citizens covered about 5% of policies; that number is now at 20%. Citizens has gained customers as private insurers have either raised rates or withdrawn from the state.
Sangam also highlighted that, according to LendingTree’s analysis, roughly one in five Florida homeowners is foregoing insurance entirely due to the limited and expensive options available.
The state is actively working to move customers from Citizens to private insurers through a “depopulation program.” Some private insurers have reentered the market in recent months.
Article by Ashley Borja, Data Reporter for the Tampa Bay Times
