Citizens Property Insurance Policy Count Reaches All-Time Low Amid Legislative Reforms

Efforts to reduce the number of policies held by Citizens Property Insurance have led to a significantly low policy count for the state-run insurer. However, officials expect a gradual rise, tempered by recent legislative reforms enacted in 2022 and 2023.

Citizens Property Insurance's President and CEO, Tim Cerio, revealed during a conference call that strategic depopulation efforts have successfully brought the number down to 278,662 policies as of last Friday. Cerio stated, "It seems that we are really at an all-time low for probable maximum loss for Citizens policy insurance, which is great news, and again attributable to the reforms."

Previously, the insurer faced a high of 1.41 million policies in October 2023, a result of private market challenges driving homeowners to Citizens, making it Florida's largest property insurer. Cerio highlighted that legislative changes have introduced mechanisms to moderate potential future increases in policy count. "With the reforms, what we think we are going to see is, instead of a drastic increase if the market really turns south at some point, those increases and decreases would be more gradual," he said.

Recent legal changes have lowered lawsuit expenses for insurers, bolstered by a hurricane-free year, leading to more competitive pricing and new market entrants in Florida. State authorities have consistently aimed to minimize Citizens' policy numbers to reduce financial exposure to potential hurricane impacts.

Originally established to provide affordable alternatives for homeowners unable to obtain private coverage, Citizens policy numbers have fluctuated with market conditions. Florida Insurance Commissioner Mike Yaworsky expressed during the June 9 Cabinet meeting that the state's insurance sector is in its best shape in a decade. Yaworsky noted, "There are well-capitalized companies ready for the oncoming hurricane season, should the worst happen."

Despite reaching a peak policy count of 1.48 million in 2012, initiatives like the "clearinghouse" were devised to steer homeowners towards private insurers when premiums were within 15 percent of Citizens' offers. By 2019, Citizens' policy count had dwindled to just under 420,000. Governor Ron DeSantis recently approved a bill (SB 1028) creating a new clearinghouse for commercial policies, allowing surplus lines insurers with favorable financial ratings to participate in policy takeouts. While not licensed in Florida, these insurers operate as "eligible" insurers in the state. The report also included contributions from News Service Assignment Manager Tom Urban.