Citizens Insurance Reduces Rates: What It Means for Florida's Market
State-owned Citizens Property and Casualty Insurance Corp. has initiated premium reductions in South Florida and other regions. This move prompts inquiries about whether private market insurers will follow by lowering rates in the upcoming year. Some private insurers have announced plans to reduce rates, potentially leading to decreased renewal premiums for policyholders.
The decision by Citizens is influenced by fewer lawsuits following tort reforms and declining reinsurance costs, both crucial factors for insurers in Florida. Initially, it remains uncertain if insurers involved in decreasing Citizens’ policy count will match premiums within 20% of Citizens’ renewal rates. If not, policyholders might choose to stay with Citizens or return if previously transferred.
Impact of Legislative Reforms on Insurance Rates
Citizens has proposed a 2.6% statewide rate reduction, with South Florida experiencing an 11% decrease for single-family homes and a 6.8% drop for condo unit coverage. These changes, stemming from 2022 and 2023 legislative reforms, are anticipated to take effect on July 1 pending regulatory compliance approval. However, decreasing premiums could unintentionally boost the Citizens policyholder count, potentially echoing past growth trends the company sought to curb.
From January to October 2025, twelve private insurers have participated in Citizens’ depopulation program, absorbing over 416,000 policies. Most of these policies stayed below the 20% premium threshold, preventing many from reverting to Citizens as stipulated by state law. The dynamic insurance market sees companies in Citizens' depopulation aware of the potential impact on premium offerings. Rate adjustments must be justifiable in filings with the Office of Insurance Regulation.
Insurance Market Dynamics and Rate Reductions
John Rollins, CEO of Patriot Select Property & Casualty Insurance Company, predicts fewer insurers will find Citizens’ policies appealing unless lower premiums are justified in future rate filings. Rollins noted that reduced reinsurance costs significantly drive potential premium decreases for the next fiscal year.
Kerrie Ruland from Monarch National Insurance underscores that cost reductions require support from loss-trend data and regulatory approval. Not all insurers may lower premiums due to cautious approaches, given the reforms' limited implementation timeframe. Between January and September, Monarch observed a 2.8% reduction in premium costs. Despite Citizens’ rate decreases, Ruland foresees minimal impact on depopulation efforts as some consumers prefer private insurers even at higher rates.
Policyholders receiving renewal notices post-July 1 will not get new offers unless they engage with Citizens through their agents for eligibility reassessment. This development underscores Citizens’ role as an insurer of last resort, highlighted by a projected policy count of 385,000 by year-end, a significant reduction from its 2023 peak.