Florida Citizens Property Insurance Board Approves 2.6% Residential Rate Reduction

The Florida Citizens Property Insurance Corporation's Board of Governors approved a plan for a statewide average rate decrease of 2.6% for personal residential policies, including a 4.1% reduction for multi-peril homeowners policies, effective June 1 pending regulatory approval. This marks a notable shift after years of calls from Citizens for rate increases due to actuarial unsoundness and rates below private market levels. The rate changes are driven significantly by legislative reforms enacted in 2022 aimed at reducing costly litigation, which had been inflating insurance costs for Citizens and the broader private market. While residential policyholders may see lower rates, commercial property policies, including condominiums, face an average proposed increase of 10.4%. Citizens, established as an insurer of last resort, grew rapidly during 2020 and 2021 amid private market challenges, peaking at about 1.4 million policyholders in 2023. However, the number of policies has since declined to around 436,420, with an expected drop to 385,000 by year-end attributed to a 'depopulation' initiative that shifts policies back to private insurers alongside improved market conditions stemming from legal reforms. Officials acknowledge that private insurers have selectively taken preferred policies, leaving Citizens with higher-risk policies tied to locations less attractive to the private sector. These developments reflect ongoing efforts to stabilize Florida's insurance market through regulatory reforms, market corrections, and strategic policymaker interventions targeting insurer litigation exposure and encouraging private sector participation.