Florida Citizens Property Insurance Rate Hikes Remain Unresolved Amid Policy Shifts
Florida’s largest government-backed insurer, Citizens Property Insurance Corporation, is dealing with unfinalized rate hikes for 2025. Initially proposed by the Board of Governors in June 2024, the increases include an average 13.5% rate hike for homeowners’ multi-peril coverage and 14.2% for condominium policies. However, with no formal decision from the Office of Insurance Regulation (OIR) as of January, these adjustments may not take effect until at least May 2025.
The delay leaves policyholders in uncertainty. Citizens’ President and CEO, Tim Cerio, confirmed that the insurer will move forward with whatever regulators decide. Despite the setback, state law caps annual increases for primary residences at 14%, while secondary homes face potential hikes of up to 50%.
Citizens and state officials maintain that higher rates are essential for the insurer to stay financially stable and competitive. Currently, Citizens’ premiums are significantly lower than private market rates, which lawmakers and insurance bodies argue disincentivizes policyholders from seeking private alternatives.
The Impact of the Depopulation Program
Integral to Citizens’ strategy is its ongoing depopulation program, aiming to reduce its policy count and shift customers to private insurers. This initiative stems from a dual objective—reducing financial risks tied to being the state’s insurer of last resort and bolstering Florida’s private insurance market.
The process involves private insurers reviewing Citizens’ policy pool and selecting policies they can absorb. Policyholders receive offers to switch to these private companies but retain the option to remain with Citizens if no comparable alternatives are available. Those who do not opt out are automatically transferred to the new carrier.
The results of this effort are notable. By the end of 2024, Citizens had successfully transferred nearly 478,000 policies to private carriers while writing approximately 369,000 new policies. The company aims to reduce its policy count by 300,000 in 2025, targeting a total of fewer than 800,000 policies by year-end.
While the depopulation program is stabilizing Florida’s insurance sector, challenges remain. Many policyholders report higher premiums or concerns about the reliability of private insurers. The program also creates confusion for homeowners, particularly those unfamiliar with the process or facing limited options in high-risk areas.
Costs of Recent Hurricanes
Another significant factor shaping Citizens’ strategies—and Florida’s broader insurance climate—is the aftermath of recent hurricanes, including Hurricanes Debby, Helene, and Milton. Hurricanes Helene and Milton caused widespread devastation across the state in fall 2024, with Hurricane Milton inflicting over $700 million in claims.
Despite more than $823 million in total claims paid by Citizens due to the storms, the insurer has weathered the financial impact without collecting additional charges, or assessments, from policyholders. This resilience is partly credited to earlier legislative insurance reforms passed in 2022, which strengthened the state’s ability to manage hurricane-related losses.
Insurance Commissioner Michael Yaworsky noted that the reforms made a major difference in the industry’s ability to absorb the financial strain. Without them, Florida could have faced a wave of carrier insolvencies. Citizens continues to rely on reinsurance and reserves to manage costs while transitioning towards actuarially sound rates that align with its statutory obligations.
What These Trends Mean for Policyholders
Hurricanes have further highlighted the urgent need for resilience in Florida’s insurance system. The impact of storms like Hurricanes Milton and Helene has driven reforms and innovation, compelling insurers and policymakers to rethink how risks are managed. For homeowners, this evolving landscape demands closer scrutiny of their insurance coverage. Staying informed about policy offers during the depopulation process and actively weighing cost-benefit considerations of switching to private insurers are essential steps. Compliance with new requirements, such as mandatory flood insurance for Citizens policyholders, is equally critical to ensure adequate coverage.
Although Florida’s property insurance sector remains under pressure, these developments aim to create a more resilient and sustainable system. Collaboration between homeowners, insurers, and regulators will be key to navigating these challenges. By staying proactive and adapting to the changing market, homeowners can better position themselves against future risks and uncertainties.