Florida Citizens Property Insurance Policies Decline
TALLAHASSEE, Fla. – Citizens Property Insurance Corp., Florida’s insurer of last resort, has seen its policy count drop to its lowest level in nearly three years, according to a recent announcement. The total number of policies fell below 850,000, marking a continued trend of depopulation.
As of Friday, the state-backed insurer held 844,688 policies, a decrease from 945,005 the previous week and 942,810 two weeks prior, based on data posted on its website.
This decline is largely attributed to the ongoing ‘depopulation’ program, which allows private insurers to assume Citizens policies. Last week alone, eight private insurers were approved to take on Citizens policies.
Depopulation Program in Action
A report scheduled to be presented to the Citizens Market Accountability Advisory Committee revealed that regulators approved the assumption of a maximum of 342,918 Citizens policies by private insurers last week. However, the number of policies that actually leave Citizens is often less than the approved maximum.
The last time Citizens’ policy count was below 850,000 was in the spring of 2022, when it stood at 817,926. The policy count had reached as high as 1.4 million in 2023.
Increased depopulation rounds, along with an improved private market, have contributed to the reduction in policies, according to insurance officials. Citizens President and CEO Tim Cerio told a House panel this month that the company projects to end 2025 with fewer than 771,000 policies.
State Goals and Financial Risks
State leaders aim to reduce the number of policies held by Citizens, partly to reduce financial risks. In the event of a major hurricane or multiple hurricanes, Citizens could face significant financial strain. If Citizens doesn’t have sufficient funds to pay claims, policyholders across the state, even those not insured by Citizens, might face extra assessments.
The depopulation program, however, can lead to higher costs for customers transitioning to private insurers. Florida law mandates that Citizens customers must accept offers from private insurers if the offers are within 20% of the Citizens premium.
Cerio noted that prior ‘takeouts’ of policies by private companies may not have been financially sound, leading to policyholders returning to Citizens. He added that he hopes a target number for Citizens policies would be in the 500,000s or low 600,000s, while State Insurance Commissioner Michael Yaworsky believes the ideal figure is around 700,000.
Cerio emphasized that private companies aren’t taking on the riskiest policies as part of the depopulation process. He stated, “The term ‘cherry pick’ is often used about the takeout process, and I would argue that is not a bad thing.” He explained that as a residual insurer, Citizens should handle policies that other insurers don’t want.
