Florida Homeowners Facing Crisis As Citizens Insurance Cuts Policies

Florida homeowners have told Newsweek they are being "ripped off" and put into financial difficulty as the state's largest home insurance provider moves to cut the number of its policies. Earlier this year, regulators in the Sunshine State approved proposals allowing private insurers to take policies from Citizens Property Insurance Corporation as the number of policies has soared in recent years. Citizens, created by the Florida Legislature in 2002, provides insurance to eligible Florida property owners who cannot find insurance coverage in the private market.

"Citizens is committed to helping its policyholders find coverage in the private market," its website reads. As required by Florida law, Citizens' Depopulation Program matches Citizens policyholders with insurance companies interested in removing their policy from Citizens and providing private-market coverage for their policy. Despite being the insurer of last resort in the Sunshine State, the number of Citizens policies has ballooned in recent years as private insurers dropped customers and raised rates due to losses caused by payouts and litigation. As of the end of September 2024, Citizens had 1,263,055 policies in force, a significant increase from the 421,332 active policies just five years ago.

Many Florida homeowners are now facing higher insurance premiums with alternative providers. Citizens explains on its website that anyone offered a new policy that is 20 percent more than their current one does not have to take up the offer. But if it is less than that, they will be moved to the cheapest coverage option, leaving no choice to remain with Citizens. While a policy is in the process of being moved, this is known as the "assumption period." Residents express their frustrations, feeling trapped in a system that offers little flexibility or control over their insurance options.

Residents like Henry Williams, a 71-year-old retiree, have shared their distress over these changes. "I can't afford to leave and I can't afford to stay," he told Newsweek, highlighting the stark reality that many Floridians now face. This sentiment is echoed by others who are grappling with the fear of losing their homes or enduring financial hardships as a result of skyrocketing insurance premiums. The landscape of home insurance in Florida is rapidly changing, and many feel that the system is failing them.

The situation reflects a broader trend in Florida's insurance market, where heightened costs and a lack of options are becoming the norm. According to Bankrate, the average insurance cost for a home valued at $300,000 in October 2024 was $5,527 per year, significantly higher than in neighboring states. As the state works to navigate these challenges, many residents are left wondering about their future and the impact of these changes on their lives.