Florida's Citizens Property Seeks Rare Homeowners Rate Cut Amid Market Improvements

Florida's Citizens Property Insurance Corporation is seeking a rare decrease in homeowners' insurance rates, filing for an average cut of 2.6% in personal lines starting June 2026. This move marks a significant shift from previous years when Citizens pursued substantial rate increases to encourage consumers toward the private market and reduce its exposure. The rate decrease request reflects improvements in the Florida insurance market following legislative reforms in December 2022 that ended one-way attorney fees and assignment-of-benefit agreements, subsequently reducing litigation costs. Citizens is expected to finalize 2025 with its lowest policy count in history, approximately 385,000, as private insurers have re-entered the market, allowing Citizens to revert to its intended role as an insurer of last resort. Nearly half of Citizens’ personal lines policyholders could see an average 11.5% premium reduction, equating to annual savings around $359. Despite this, a 10.4% average rate increase is projected for Citizens' commercial lines in late 2026, though the private sector is making considerable inroads in taking over commercial policies, with many policies leaving Citizens' portfolio due to competition from private carriers offering comparable premiums. This trend is bolstered by recent rate decreases filed by several Florida insurers, including Heritage Property & Casualty, Patriot Select, and Security First, signaling a broader market adjustment. Additionally, Citizens' improved financial position gives it leverage in negotiating lower reinsurance costs amidst moderating industry rates and anticipated lower U.S. interest rates, although the board acknowledges ongoing hurricane risk in Florida could impact future exposures and underwriting strategies.