Florida’s Largest Insurer Hits Major Milestone With Policy Cuts

Florida’s insurer of last resort, Citizens Property Insurance Corp., has trimmed its total policy count to under 800,000, the lowest number reported by the not-for-profit company in three years.

The drop highlights the enormous progress made by Citizens in scaling back its presence in the Florida property insurance market after its size ballooned over the past few years due to several private insurers going bust, leaving the state or reducing coverage in high-risk regions.

Why Is Citizens Dropping Policies?

Citizens, which was set up by the Florida legislature in August 2002, offers property insurance coverage to all Florida homeowners who cannot find it in the private market.

While the company is funded by policyholder premiums, Florida law requires Citizens to levy assessment on most homeowners in the Sunshine State should it experience a deficit in the wake of a particularly damaging storm or other type of natural disaster.

This is why, when in 2023 Citizens’ policy count reached a peak of 1.4 million, lawmakers in the state started expressing concern that the insurer might struggle to cover a devastating hurricane on its own. A so-called “depopulation” effort was then launched to shrink Citizen’s policy count, with the goal of returning it to a healthy, sustainable level.

Under Florida law, Citizens’ policyholders must switch to a private insurer if offered a policy with a premium no more than 20 percent higher than their Citizens rate. For the Sunshine State, which faced a highly volatile market over the past few years due to skyrocketing premiums and shrunk availability, Citizens’ depopulation was only achieved after lawmakers intervened to stabilize the market.

Those efforts included a reform of the state’s tort legislation meant to cut down on widespread fraud and excessive litigation in the Florida property insurance sector, and the approval of new insurers into the state’s market.

In December 2024, Citizens’ policy count dropped to under 1 million for the first time since 2023.

How Many Policies Does Citizens Have Now?

According to the latest data shared by the insurer on Wednesday, Citizens had a total of 777,595 policies as of Friday, down from 820,882 a week earlier. It was the lowest policy count reported by Citizens during a comparable time of the year since June 2021

Citizens President and CEO Tim Cerio told members of the Citizens Board of Governors on Wednesday that he expected the company to be able shed an extra few thousands off its policy count, ideally plunging to fewer than 654,000 policies by the end of the year.

Cerio said he thinks that Citizens’ depopulation efforts would likely slow down in the coming months as hurricane season continues, but they will once again pick up in the fall.

“Our policy count is going to creep up now, during the hurricane season,” he said on Wednesday. “The [policy] takeouts aren’t happening, and you do have new business coming in. But we are projecting that once the takeouts resume in the fall, that number will drop. Again, we should be, hopefully, knock on wood, just under 654,000 policies [at the end of the year].”

What Does This Mean For Florida Homeowners?

Citizens’ success in moving thousands of its policies into the hands of private insurers is a sign that the Florida property insurance market “is well into recovery,” according to Cerio.

The vertiginous surge reported by home insurance premiums in Florida has slowed down significantly, though rates remain high. The average homeowner in the Sunshine State spent $5,409 a year for $300k dwelling coverage, according to Bankrate—more than double the national average of $2,341 per year.

Since lawmakers passed the tort reform legislation, 12 new companies have entered the Florida market, while since 2024 six of ten national companies operating in Florida have expanded their coverage, and four have filed for rate decreases.

Since 2024, according to Citizens, at least 27 private carriers have filed for rate decreases, while at least 41 companies requested no rate increase.

“The recovery is there,” he said on Wednesday. “You are seeing more and more competition come into the market, which is good for Floridians. It’s good for Citizens, and it promotes a smaller Citizens for us to really return to that role as the insurer of last resort.”