Florida's Largest Insurer Cuts Over a Third of Policies

Citizens Property Insurance Corporation, Florida's largest insurer, has drastically reduced its policy count and is planning to cut over a third of its policies by the end of this year.

In a press release on December 4, the insurer said that its policy count had dipped below 1 million for the first time in more than two years, and is now at 987,650.

Since January, the insurer has offloaded more than 428,000 policies to private insurance companies under its "Depopulation Program."

By the end of the year, its policies are expected to fall to around 900,000, which would mark a third decrease from the roughly 1.4 million policies it held at the beginning of 2024.

"These are encouraging signs as we continue our efforts to return to our role as Florida's insurer of last resort," Tim Cerio, Citizens' president and CEO said in the press release.

"As Citizens shrinks, so does the risk of assessments on Floridians who are not Citizens policyholders. This should be welcome news to all."

Citizens Insurance was established as a state-backed insurer of last resort in response to Florida residents struggling to obtain policies amid a major surge in premiums among private insurers.

Despite its intended purpose, it became the largest insurer in the state.

Florida homeowners pay the highest insurance premiums in the country, on average $11,163 a year as of July 2024, according to data shared with Newsweek by the virtual insurance company Insurify. The national average premium at this time was $2,435 per year.

These high rates are partly due to the state's susceptibility to hurricanes. Florida was hit by three hurricanes this year—Debby, Helene, and Milton—which further strained the insurance market.

Citizens Insurance has been offloading its policies this year with approval by the Office of Insurance Regulation, aiming to reduce the financial burden on the state.

In the press release, the insurer noted that "the Florida property insurance market continues to improve."

Citizens said that media had inaccurately reported a higher rate of claims denials following the three hurricanes earlier this year, and stated that the actual denial rate was lower.

Cerio told the Citizens Board of Governors quarterly meeting that the insurer had denied 13.2 percent of all claims filed after determining there was no coverage under the terms of the policy.

The press release said that media accounts did not account for claims that were initially accepted but later were found to either not reach deductible levels, or were withdrawn or found invalid for another reason.

It noted that, as the state's insurer of last resort, Citizens has historically had a denial rate that is slightly higher than that of the private market.