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Citizens Property Insurance, Florida's insurer of last resort, has dropped tens of thousands of policies in the past week as it continues its depopulation efforts to stabilize the Sunshine State's shaky sector.
During the week ending December 20, the not-for-profit company dropped its policy count from 982,892 to 935,948, getting closer to its goal of reaching a total of 900,000 policies by the end of the year, according to new data published on Citizens' website.
Newsweek contacted Citizens for comment by email early on Monday.
Why It Matters
Florida's insurer of last resort, which offers policies to those unable to obtain them in the traditional market, has grown massively in the past few years as private insurers cut coverage across the state or withdrew from it entirely.
By fall 2023, Citizens counted a total of over 1.4 million policies, a record that concerned legislators in the state. While Citizens is funded by policyholder premiums, Florida law requires that the company levy assessments on most of the state's policyholders should it experience a deficit following a particularly devastating extreme weather event.
That means that the state, potentially, is only one very bad storm away from seeing its homeowners insurance market be completely upended. That is, unless more is done to stabilize the sector—including depopulating Citizens and encouraging private insurers to stay in the market.
What To Know
Since reaching a peak in the number of policyholders in the fall of 2023 and becoming Florida's largest property insurance provider, Citizens has been trying to drop off policies, matching policyholders with fiscally sound private insurers.
While by September 30 Citizens still counted a total of 1,263,055 policies in force, the company has recently sped up its depopulation efforts in view of reaching its goal of 900,000 policies by the end of 2024.
The latest monthly policy count shows that, as of November 30, Citizens had a total of 988,051 policies in force—a steep drop compared to two months earlier. The company is still 35,948 policies away from its 2024 goal.
"The successful depopulation of Citizens in 2024 is a strong signal of the vast improvement we have seen in Florida's property insurance market," Mark Friedlander, director of the Insurance Information Institute [Triple-I], told Newsweek.
"Private insurers have been able to assume hundreds of thousands of Citizens policies this year because they have improved their financial position and have the capacity to take on more risk.
"This is the result of the positive impacts of legislative reform which addressed the man-made factors that generated Florida's risk crisis: laws were passed to stop legal system abuse and assignment of benefits claim fraud."
According to Friedlander, Citizens considers 400,000 to 500,000 policies in force a manageable level of risk.
"Citizens plans to maintain its higher-risk policies while the better risks are depopulated to the private home insurance market," he said.
For a policy transfer from Citizens to a private insurer to be approved, surplus line carriers' offer must be within 20 percent of the cost of the state's insurer of last resort. In June, Citizens' Board of Governors backed a proposal to increase its rate by an average of 13.5 percent for its most common type of policy.
What People Are Saying
Triple-I Director Mark Friedlander, on NPR in July: Citizens still had "a long way to go" before ending its depopulation efforts and reaching manageable risk levels. "And if we continue to see such a large gap in costs between Citizens and the private market, it's going to take much longer."
Friedlander told Newsweek: "We expect depopulation of Citizens to continue throughout 2025 as Florida's private insurance market sustains its recovery and remains in a stable financial position."
What's Next
Additional rounds of depopulation efforts are planned for February and March 2025, as Citizens tries to slim its total policy count further. These should help stabilize the Florida homeowners insurance market, which has suffered from a combination of increased risk posed by climate, widespread fraud and excessive litigation.
However, the state is far from out of the ongoing crisis—especially as the threat posed by climate change is bound to grow in the future. The rising cost of insurance in the state and the limited availability of coverage are expected to be a topic of discussion for lawmakers in Tallahassee next year.
Update 12/30/24, 10:44 ET: This article was updated with comment from Mark Friedlander.
About the writer
Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more