Private insurers set to take thousands of Citizens policies. Here’s why it matters

Citizens now holds 1.35 million policies

ORLANDO, Fla. – Thousands of Citizens Insurance policyholders may have to pay pricier premiums as the state approves a plan to move policies to private insurers. Florida Insurance Commissioner Michael Yaworsky signed orders this week, clearing the way for companies to pull as many as 184,000 policies from Citizens starting in October.

Proposals from Slide Insurance Co., Safepoint Insurance Co., Southern Oak Insurance Co., Florida Peninsula Insurance Co., and Monarch National Insurance Co. were all approved.

Florida’s Office of Insurance Regulation says they have seen greater interest in what they call the “Citizens Depopulation” program this year. A spokesperson for the OIR told News 6 there are currently eight companies participating in the program this year, and the number of policies being requested in the first half of 2023 is more than the total number of policies requested in 2022. OIR has approved 280,000 policies for takeout in 2023.

The program is designed to match Citizens policyholders with insurance companies interested in removing their policy from Citizens and providing private-market coverage for their policy.

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Lisa Miller, an insurance advisor and former deputy insurance commissioner, tells News 6 the fact that companies want to take on more of Citizens’ policies is a great sign.

“That may seem odd that we would want to shrink the size of Citizens, but we really do because Citizens is the government’s insurance, which means we’re all paying for it,” said Miller.

The total number of Citizens policies has doubled over the past two years as private insurers have raised rates and reduced policy counts. The total number of Citizens policies in Florida is now 1.35 million, compared to 661,150 in August 2021.

A spokesperson for Citizens sent News 6 the following statement:

“Citizens is encouraged by the interest private companies have in expanding their business in Florida. Reducing Citizens’ exposure reduces the risk of surcharges and assessments on its policyholders and other Florida insurance consumers.”

When asked if she’s encouraged by the state of Florida’s insurance industry compared to last year, Miller said she believes we are in a much better position.

“Absolutely,” said Miller. “I mean, a year ago it was frightening to see how insurance companies didn’t want to be here. The legislature was struggling.”

Lawmakers attempted to address the issues with a second special session last year and passed legislation aimed at limiting the legal costs for insurers. Since then, some have gone insolvent or left the state. Last month, Farmers Insurance announced they would withdraw from Florida. Farmers said only Farmers-branded insurance products are being ended in Florida, which account for roughly 100,000 auto, home and umbrella policies.

Tom Cotton, the owner of Hugh Cotton Insurance, says most insurers are being driven by re-insurance costs.

“And the terms of re-insurance renewals are what’s driving most exits and the reduction in policy count that most of the carriers are dealing with,” said Cotton.

Cotton says more private carriers showing that they are willing to take on more risk is proof that the fixes the legislature put in place during the last legislative session are actually beginning to work.”

Cotton says the immediate future for customers remains the same.

“Kicking the can down the road 18 to 24 months we will begin to see improvements because the backlog of litigation that was filed when the governor signed the bill should be clear, and the re-insurers should begin to look at Florida carriers a little differently,” said Cotton.

Miller also believes it will take time for homeowners to see their rates improve.

“Remember, there’s three reasons why our rates go up: the weather, which we can do nothing about, litigation, which our legislature has done a lot, and number three is re-insurance,” said Miller.

Florida’s Office of Insurance Regulation provides tools and resources to help customers navigate their insurance and make decisions. You can read more about what they offer HERE.

Among the companies that are still active in Florida are the following:

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About the Author:

Catherine, born and raised in Central Florida, joined News 6 in April 2022.