Florida Insurance Commissioner Michael Yaworsky announced the approval of proposals from three private insurers to assume up to 160,440 policies from Citizens Property Insurance Corp. This decision is part of a broader ‘depopulation’ program aimed at decreasing Citizens’ policy count. As of Friday, Citizens held 982,892 policies. However, this number is anticipated to drop due to the planned transfer of policies to private insurers.
Among the approved private insurers, Slide Insurance Co. is set to assume up to 100,000 policies, American Integrity Insurance Company of Florida will take up to 35,000, and Trident Reciprocal Exchange will take up to 25,440. These figures represent the maximum number of policies each company can assume, though the actual number of transitioned policies is expected to be lower.
Citizens reached a peak of 1.412 million policies last year, driven by private insurers’ financial struggles and subsequent rate hikes. The depopulation program, alongside legislative efforts to strengthen the private insurance market, has contributed to a steady decline in Citizens’ policy count. Citizens was initially established as an insurer of last resort, with state officials expressing concern over the financial risks posed by potential hurricane damage. If faced with an inability to cover claims, Citizens could impose additional costs on all state policyholders through assessments.
Recent improvements in the private insurance market have also played a role in reducing the inflow of new policies to Citizens. Tim Cerio, President, and CEO of Citizens, highlighted this trend during a Board of Governors meeting, noting a 30% decrease in new policies compared to forecasts. Cerio remarked, ‘We’re certainly moving in the right direction.’
However, homeowners transferred to private insurers might face increased premiums due to a state law. This law mandates Citizens’ customers to accept insurance offers from private companies if the proposed premiums are within 20% of Citizens’ current rates. This means if a private insurer offers coverage at a premium 19% higher than Citizens’, the homeowner must accept this offer.
Additionally, a depopulation round approved last month will see another batch of policies shifting from Citizens to private insurers in February, further decreasing Citizens’ policy count.
This strategic shift of policies from Citizens to private insurers marks another step towards stabilizing Florida’s homeowners’ insurance market. By reducing the number of policies under Citizens, the state aims to mitigate financial risks associated with weather-related disasters while fostering a healthier private insurance sector. As these transitions unfold, homeowners may need to navigate potential changes in their insurance coverage and costs.
Source: Floridarealtors
