State-run insurer finds success with its depopulation efforts
Florida’s Citizens Property Insurance, which offers homeowners insurance coverage to consumers, has successfully shed the bulk of its policies over the past year. The state-run organization has been trying to depopulate itself of policies in order to address its financial issues, reducing its exposure to risks while becoming more stable and resilient against future natural disasters. The policies released by the organization have been picked up by private companies, which continue to provide consumers with homeowners insurance coverage.
Citizens Property Insurance now has 598,408 policies in its portfolio
According to Citizens Property Insurance, it is now responsible for 598,408 policies, the lowest number of policies it has ever had. The organization has a goal of reducing its portfolio to 450,000 policies. In the event of a major storm, however, the organization is likely to stall its depopulation efforts in order to aid in recovery efforts and honor its homeowners insurance policies. A major natural disaster could lead to a surge of people seeking coverage through the state-run program, which would bolster policy numbers.
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Disastrous hurricane seasons leave organization in financial distress, which has lead to depopulation efforts
The organization was first formed in 2002 and serves as a last resort for those that want homeowners insurance coverage. Many of the properties that the organization covers are found in coastal areas, where exposure to natural disasters is quite high. Following the devastating 2004 and 2005 hurricane seasons, Citizens Property Insurance provided coverage for 1.5 million homeowners. In the wake of powerful storms, the organization fell under financial distress, which lead to rising premiums and depopulation.
Private companies are expanding their business lines in Florida because of favorable market conditions.
Florida continues to dodge major disasters
Private companies have shown willingness to take up the homeowners insurance policies released by Citizens Property Insurance because of favorable market conditions. Florida has managed to avoid any significant natural disaster for several years, which has limited the damage that has been done to the property sector. As such, private companies have been expanding their business lines throughout the state.