Citizens Property Insurance Corp., the state-backed insurer of last resort, has experienced continued growth, exceeding 1.268 million policies last week. This trend, however, is anticipated to reverse as a depopulation program takes effect, allowing private insurers to assume a significant portion of Citizens’ policies.
The surge in Citizens’ policy count is attributed to the instability of the private insurance market in recent years. As private insurers grappled with financial challenges, Citizens became a haven for many Florida homeowners seeking coverage.
This resulted in Citizens becoming the state’s largest insurer, a situation with inherent financial risks.
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To mitigate these risks, Florida is actively pursuing a depopulation strategy. This program enables private insurers to take over policies from Citizens, thereby reducing its overall size and exposure. Regulators have already approved the transfer of up to 414,258 policies this month, with further transfers anticipated in November and December.
While historical data suggests the actual number of policies leaving Citizens may fall short of the approved amounts, the depopulation program is nonetheless a crucial step towards stabilizing the Florida insurance market and reducing the financial burden on the state.
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