FLORIDA – Homeowners’ insurance policies appear poised to continue flowing out of the state’s Citizens Property Insurance Corp. in 2025.
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The latest indication came Monday when Florida Insurance Commissioner Michael Yaworsky signed orders approving proposals by three private insurers to assume up to 160,440 policies from Citizens in March.
The orders followed months of similar approvals as Citizens, the state’s largest property insurer, has reduced its policy count through what is known as a “depopulation” program. Citizens had 982,892 policies as of Friday, but the count is expected to drop this week because private insurers will assume a batch of policies through a depopulation round approved in October.
In the orders approved Monday, Slide Insurance Co. will be able to assume up to 100,000 policies in March; American Integrity Insurance Company of Florida will be able to assume up to 35,000 policies; and Trident Reciprocal Exchange will be able to assume up to 25,440. Those are maximum numbers and, based on past depopulation rounds, the actual number of customers shifting from Citizens to the private insurers will be smaller.
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Citizens reached as many as 1.412 million policies last year after private insurers shed customers and raised rates because of financial problems in the industry. But the depopulation program — and changes in state laws aimed at bolstering the private insurance market — have led to a steady decline in the number of Citizens policies.
Citizens was created as an insurer of last resort, and state leaders have long worried about financial risks if the state gets hit by a major hurricane or multiple hurricanes. If Citizens couldn’t pay all of its claims, it could collect additional money from policyholders throughout the state — including possibly non-Citizens policyholders — to cover costs through what are known as assessments.
Citizens President and CEO Tim Cerio said this month that improvements in the private market also have helped reduce the number of homeowners turning to Citizens for coverage.
“We think we are going to end the year at only 369,000 new policies, which is 30 percent below what we forecast. So, because the market is getting healthier, we are seeing less new business come in,” Cerio said during a Dec. 4 Citizens Board of Governors meeting. “We’re certainly moving in the right direction.”
The depopulation process, however, can lead to some homeowners facing higher insurance premiums.
That is because of a law requiring Citizens customers to accept offers of coverage from private insurers if the offers are within 20 percent of the cost of Citizens premiums. For example, if a homeowner received an offer of coverage from a private insurer that is 19 percent higher than the Citizens premium, the homeowner would have to accept it.
In November, the state also approved a depopulation round that will happen in February.