Florida Approves Nearly 229,000 Citizens Policies for Takeout by Private Insurers
Tallahassee, FL – Florida regulators have greenlit the removal of nearly 229,000 policies from the state-backed Citizens Property Insurance Corporation, transferring them to private insurers in an effort to reduce risk for taxpayers and stabilize the insurance market.
The Florida Office of Insurance Regulation (OIR) announced the approval Wednesday, allowing 13 private insurance companies to assume policies from Citizens, the insurer of last resort. The move is part of a long-term strategy to shrink Citizens’ rapidly growing policy count, which has surged in recent years due to market instability and rising premiums.
Why the Shift?
Citizens was created to provide coverage for homeowners who cannot find insurance in the private market. However, with over 1.2 million policies currently on its books, state officials warn that a major hurricane could strain its financial resources, potentially leading to assessments on all Florida policyholders to cover losses.
To mitigate this risk, Florida regularly conducts “depopulation” efforts, offering private insurers the opportunity to take over Citizens policies. This latest round—one of the largest in recent memory—includes companies like Slide Insurance, Safepoint Insurance, and Florida Peninsula.
What Policyholders Should Know
- Automatic Transfer: Policyholders will receive notifications if their coverage is shifted to a private insurer.
- Option to Opt Out: Homeowners can choose to remain with Citizens if they prefer, but must actively decline the takeout offer.
- Potential Savings: Many private insurers offer competitive rates, though some may charge higher premiums than Citizens.
Industry Response
Insurance Commissioner Michael Yaworsky stated that the depopulation program is “critical to maintaining a healthy insurance marketplace.” Meanwhile, industry groups argue that moving policies to private carriers helps distribute risk more efficiently.
However, some consumer advocates warn that not all private insurers have the same financial stability as Citizens, urging policyholders to research their new providers.
What’s Next?
The takeouts will occur in phases, with the first batch starting in November 2024. State officials say additional depopulation efforts are expected as more private insurers re-enter the Florida market.
For now, the move marks a significant step in Florida’s ongoing battle to stabilize its troubled property insurance landscape.
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This is a developing story. Check back for updates.