State-Backed Citizens Property Insurance Faces Scrutiny Amidst Florida’s Home Insurance Market Challenges
Citizens Property Insurance, often regarded as the last resort for Florida homeowners in the challenging home insurance market, has come under scrutiny this week as Governor Ron DeSantis raised concerns about its stability.
DeSantis expressed apprehension, stating, “They have taken out hundreds of thousands of policies from Citizens, which was created decades ago. It is not solvent, and we can’t have millions of people on that.”
However, Mark Friedlander of the non-partisan and nonprofit Insurance Information Institute offered a different perspective on the governor’s remarks. Friedlander emphasized, “We’re not here to defend or analyze what he said. It is just not accurate.”
Contrary to concerns raised, Friedlander highlighted the overall improvement in the property insurance market in Florida, including Citizens, which has seen gradual strengthening after enduring several challenging years. He clarified, “Here’s the bottom line. Citizens could never go insolvent. They’re not a private insurer. There are backstops in place through Florida regulations that ensure Citizens will always stay solvent and pay all its claims.”
One of the key strategies contributing to Citizens’ resilience is the transfer of several hundred thousand customers to private insurance companies. The ideal scenario for the state-backed insurer is to retain approximately 400,000 to 500,000 customers in total. While Citizens has seen a decrease from its peak of 1.4 million customers, significant movement is still necessary.
Currently, Citizens serves slightly over one million customers, with plans to transition an additional 300,000 to 400,000 customers away from its coverage this year. Additionally, seven new insurance companies are poised to enter the Florida market, offering homeowners more options for coverage.
Friedlander emphasized, “The bottom line is that you are going to have more in Florida than you have had in many years to shop your coverage.” While these developments bode well for consumers in the long run, Friedlander cautioned that significant changes in the home insurance market will take time and may not materialize before the upcoming hurricane season.
