Citizens Property Insurance Sees Policy Reductions
Citizens Property Insurance Corp., Florida’s state-backed insurer of last resort, is experiencing a significant decrease in policyholders, particularly in South Florida. This shift comes after an active hurricane season and is largely attributed to legislative changes aimed at stabilizing the state’s property insurance market.
Anne Geggis, insurance reporter for The Palm Beach Post.
Legislative Reforms and Market Stabilization
Legislative reforms enacted in 2021 and 2022 are credited with stabilizing the insurance market by curbing litigation. While these reforms might not be immediately translating into lower property insurance costs, experts predict stabilization and possible slight price decreases in the near future.
Increased Competition from Private Insurers
The reduced number of lawsuits against insurers has made private companies more willing to compete for customers, especially in areas that have historically been difficult to insure. Citizens officials report that Palm Beach, Broward, and Miami-Dade counties account for the largest numbers of policyholders moving to private insurers.
According to Tim Cerio, Citizens’ president and CEO, this situation is “really unique.” He noted that these five counties account for more than half the policyholders who have switched to private insurance.
Citizens’ Shrinking Footprint
Citizens expects to have a significantly smaller book of business compared to when the state’s property insurance market was struggling. Cerio stated that by the end of 2025, Citizens projects to have approximately 738,000 policyholders, a notable decrease from the 1.4 million in September 2023. This reduction means Citizens is dropping 478,000 policyholders in 2024, largely concentrated along the tri-county coast. As a result they will not have to spend $370 million in reinsurance, the insurance that Citizens and other companies purchase to cover catastrophic events.
Diminished Lawsuits
Cerio largely credited the Florida Legislature and Governor Ron DeSantis for the turnaround of Florida’s damaged property insurance industry. Changes to insurance regulations and tort laws passed in 2021 and 2022 have reduced the incentive for policyholders to sue their insurers in settlement disputes. During the past hurricane season, which saw three hurricanes make landfall in Florida, there has been a significant number of claims, and those claims are not turning into lawsuits, said Cerio.
Lawsuits against insurers peaked in 2021 with nearly 100,000. In 2024, property owners filed 57,120 lawsuits against their insurers, the fewest since 2017.
Cerio stated that the legislative changes “have made a tremendous, tremendous impact.”
Focus on Hurricane Claims
The audit committee of Citizens’ Board of Governors received updates on claims from the 2024 storms that struck Florida’s Gulf Coast.
- Hurricane Milton: Cost Citizens $2.07 billion to investigate, manage, and settle insurance claims.
- Hurricane Helene: Cost Citizens $315 million.
- Hurricane Debby: Cost Citizens $76.5 million.
None of the storms resulted in losses large enough to trigger payments from the reinsurance Citizens purchases.
Homes damaged by Hurricane Helene.
