Citizens Property Insurance Corporation has recently disposed of over 100,000 policies for home insurance in Florida. Citizens has taken a major step to minimize its risk and return the Florida insurance market to private ownership.
Florida Home Insurance Crisis: Why it Matters
Citizens Property Insurance Corporation (CPIC) was created by Florida’s Legislature in 2002. It provides essential home insurance to Florida property owner who can not secure a policy from a private insurance company. Citizens’ policy numbers have increased in recent years as private insurers either withdrawn from the market, or raised premiums significantly. The increase is due largely to claims payments and litigation related to damage to property.
Private insurers can selectively take over Citizens’ policies in Florida until 2024. The program gives Florida homeowners an alternative to the state-backed insurer, and stabilizes the Florida market for home insurance.
Detail: Market impact and depopulation efforts
The depopulated policies have been taken over by eight different insurance providers, with Manatee Insurance Exchange assuming the largest portion—more than 32,000 policies. This is part of a larger strategy that aims to move the risk back onto the private sector, and foster competition within Florida’s home insurance market.
Between September and November of last year over 200,000 Citizens policies were removed. Citizens’ policy number has dropped below 850,000 policies for the first since spring of 2022, thanks to recent efforts at depopulation. Citizens’ policy count was 817,926 on March 31, 2020, and increased to 851,006 in April 2022.
Florida residents pay some of the most expensive home insurance premiums in the United States. Bankrate data shows that the average Florida homeowner pays $5,488 per year to cover a $300,000 home. The average national rate is $2,258. This amount is much higher. Location can have a big impact on rates. Residents in West Palm Beach, for example, may have to pay $8,240 on average for the same coverage for a $300,000. This highlights the need for homeowner insurance that is affordable.
Viewpoints of Stakeholders: Citizen Commitment and Regulatory Control
Citizens official websiteThe company “is committed to helping policyholders locate coverage on the private market.” Florida law mandates the Depopulation Program which connects policyholders of Citizens with approved private insurance companies. It facilitates a smooth transition, and ensures regulatory compliance.
Look Ahead at Future Population Depopulation Expectations and the Market
NBC Miami reported that Tim Cerio (Citizens’ president and CEO) anticipates a slightly lower number of active policies by 2025. Citizens Property Insurance Corporation will continue to depopulate the Florida market in March and April as part of ongoing efforts. The initiatives are designed to provide Florida homeowners with affordable, reliable insurance coverage by utilizing private solutions such as wind mitigation discounts or understanding the flood zones around coastal properties.