Florida's most used home insurance company Citizens announced it will begin shedding plans next week. Although more Floridians use Citizens than any other insurance provider at 1.171 million, it's not a choice as those property owners are unable to buy policies elsewhere.
Legislation is working through the Florida Legislature to reduce its rolls even further by limiting second homes that would be eligible for Citizens. Gov Ron DeSantis told CNBC earlier this year that Citizens is "not solvent" drawing into question whether the insurer would be able to do its job in the event of a major storm, Florida Politics reported.
Last year, Citizens jumped into the top 10 property insurers nationally. Data from S&P Global shows Citizens grew over 65% in a single year as more and more Florida homeowners found themselves unable to buy policies elsewhere.
Average home insurance costs in Florida total $4,218 a year, over $1,400 more than the national average of $2,777, putting more pressure on the insurer of last resort. Natural disasters like tropical storms and hurricanes along with inflation have combined to drive property insurance costs up as high as 70% in Florida, according to S&P Global Market Intelligence.
Created as an insurer of last resort, Citizens in recent years has outpaced every other provider in Florida, where customers found themselves dropped from their insurance companies or completely priced out.
Citizens has also been actively working through its "depopulation program," a way of moving policyholders onto private insurers. At its peak, Citizens held a massive 1.412 million policies in Florida last year, shedding nearly 300,000 policies since its record numbers last September, the provider reported.
Total policies issued by the company fluctuate based on eligibility and could fluctuate further depending on the ramifications of the new legislation being considered.
Slide Insurance Co., Florida Peninsula Insurance Co., Edison Insurance Co., Southern Oak Insurance Co., American Traditions Insurance Co. and People's Trust Insurance Co. — have received approval to assume Citizens policies next week, according to the state Office of Insurance Regulation website.
Property owners who receive depopulation notices are those who Citizens has determined may no longer be eligible for the policies they provide.
What is Citizens insurance?
Citizens Property Insurance Corporation is a nonprofit created by the state of Florida as a response to hurricanes and tropical storms driving up the price of home insurance in the state.Although run like a private corporation, Citizens has an oversight panel made up of the governor, chief financial officer, attorney general and commissioner of agriculture.
When was Citizens insurance established?
In 2002, the Florida legislature created Citizens as a "not-for-profit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market," according to the Citizens website.
How to get Citizens homeowners insurance
Citizens insurance is not available to everyone. Only those who are unable to purchase a policy from any other provider and those who have been priced out of the private market are eligible for insurance.
Homeowners can buy into Citizens as a last resort due to cost if the next cheapest plan for the same coverage is 20% higher or more.
FAQs
Citizens has also been actively working through its "depopulation program," a way of moving policyholders onto private insurers. At its peak, Citizens held a massive 1.412 million policies in Florida last year, shedding nearly 300,000 policies since its record numbers last September, the provider reported.
Is it hard to get homeowners insurance after being dropped? ›
If your insurer nonrenewed or cancelled your policy because your house needs repairs or you filed too many claims, you may have difficulty finding an insurance company willing to insure your home.
Why are insurance companies dropping customers? ›
An insurance company can drop you for a number of reasons. Most commonly, insurers will cancel or opt not to renew coverage for drivers who file an excessive amount of claims. Drivers who are convicted of a DUI, perpetrate insurance fraud or fail to pay their insurance premium can also face being dropped.
What is the citizens insurance depopulation program? ›
The Depopulation program works with private-market insurance companies interested in offering coverage to Citizens policyholders. Participating companies must be approved by the OIR. Approved takeout companies can offer to take over your Citizens policy at any time during your policy period.
Is citizens good insurance in Florida? ›
As a last-resort insurer, Citizens serves a valuable purpose for Florida homeowners who have trouble finding affordable insurance for their homes. However, its coverage options are limited in comparison with what you'd find on the private market.
Is State Farm pulling out of Florida? ›
WASHINGTON, D.C. (NewsNation) — Days after a major insurance provider announced it was pulling out of Florida due to environmental risks, State Farm Insurance announced Thursday it is recommitting itself to the residents of the state, NewsNation has learned.
How many claims before homeowners insurance cancels? ›
More than two claims in a five-year period may make it difficult to find coverage.
What happens to my mortgage if my homeowners insurance is cancelled? ›
Your mortgage lender generally requires your property to be insured. If you stop paying for coverage or let the policy expire, the mortgage lender is allowed to buy insurance and charge you for it. This is called force-placed insurance or lender-placed insurance.
How long does Cancelled home insurance stay on record? ›
How long does canceled insurance stay on my record? Insurance companies report things like claims and cancellations to the Comprehensive Loss Underwriting Exchange (CLUE) database. The CLUE records typically run anywhere from five to seven years.
Will homeowners insurance increase in 2024? ›
Homeowners insurance rates have risen dramatically, according to an analysis by Bankrate. The average premium in February 2024 is about $141 a month for a home with $250,000 worth of dwelling insurance. That represents a 23% increase from January 2023.
As well as leaving America's most populous state, American National has plans to cease offering homeowners' insurance in an additional eight states, including Arkansas, Colorado, Louisiana, Minnesota, Oklahoma, South Carolina, South Dakota, and Washington.
Why would homeowners insurance drop you? ›
Insurers typically can cancel a policy if: You fail to pay your insurance premium. You committed insurance fraud or seriously misrepresented information on your insurance application. You don't make timely repairs requested by a new insurer after a home inspection that was ordered by the insurer.
What is a depopulation letter? ›
If one or more private-market companies select your policy for depopulation, you will receive a Depopulation Packet from Citizens informing you that those companies would like to remove your policy from Citizens and assume coverage of your property.
What is depopulation? ›
the action of causing a country or area to have fewer people living in it: rural depopulation/depopulation of the rural areas.
What causes depopulation? ›
Causes. A reduction over time in a region's population can be caused by sudden adverse events such as outbursts of infectious disease, famine, and war or by long-term trends, for example, sub-replacement fertility, persistently low birth rates, high mortality rates, and continued emigration.
Which insurance companies are pulling out of Florida? ›
Earlier in July, Farmers Insurance announced that it is no longer offering new business or renewing any of its auto, home and umbrella policies in Florida. In mid-2022, Bankers Insurance Company reported its exit from Florida, only to be followed by AIG and Lexington Insurance, a subsidiary of AIG.
What insurance company just pulled out of Florida? ›
Farmers Insurance pulls out of Florida, affecting 100,000 policyholders. Farmers Insurance will stop offering its policies in Florida, including home, auto and umbrella policies, in a change that will force thousands of people to change their insurance provider.
What insurance companies leave Florida? ›
Three major companies have voluntarily withdrawn from the state since last year: Farmers Insurance, Bankers Insurance and Lexington Insurance, a subsidiary of AIG. AAA is not renewing a “very small percentage of higher exposure homeowner's policies,” it told the Palm Beach Post.
Are insurance companies fleeing Florida? ›
In simple terms, insurance companies are leaving Florida because it's best for their bottom line. When an insurance company is paying out more in claims than it's taking in, they run the risk of not being able to pay out any claims at all.
