Florida’s property insurance market is showing signs of recovery following recent legislative changes aimed at stabilizing the industry. Citizens Property Insurance Corp. President and CEO Tim Cerio reported to the insurer’s board of directors on Wednesday that measures passed by lawmakers in 2022 and 2023 have helped bring the market “back from the brink of collapse.”
The reforms, which include making it more difficult for policyholders to sue insurance companies, have resulted in an improving market environment despite three catastrophic hurricanes impacting the state this year. According to Cerio, many insurance companies have filed for rate reductions, and fewer new policies are being added to Citizens, which is the state’s insurer of last resort.
Decreased Property Insurance Rates and Stabilization
Cerio noted that 15 insurance companies have made 22 filings for rate decreases this year, while 29 companies have made 42 filings for zero percent increases. Additionally, reinsurance costs for most companies have dropped compared to 2023. This comes after years of consecutive underwriting losses, with many insurers reporting net profits in 2023, indicating stabilization in the market.
Efforts to Reduce Citizens Policies
Efforts to reduce the number of policies held by Citizens, known as “depopulation,” have also exceeded expectations. Cerio reported that the number of policies held by Citizens is expected to drop to 907,000 by the end of the year, down from a peak of 1.412 million last year. The majority of policies being moved to private insurers are located in Broward, Miami-Dade, Palm Beach, Hillsborough, and Pinellas counties, areas previously avoided by insurers due to high litigation rates.
Cerio emphasized that reducing Citizens’ size is crucial for minimizing financial risks, particularly if the state is hit by major hurricanes. Fewer policies in Citizens mean less exposure and a reduced likelihood that non-Citizens policyholders would have to pay assessments to cover shortfalls.
Hurricane Claims and Payments
Citizens has paid out more than $516 million to settle property claims following Hurricanes Debby, Helene, and Milton, with the majority—$435 million—related to Hurricane Milton. An additional $52.6 million was paid in expenses to policyholders affected by the storms. Some claims were closed without payment, often because damages were not covered under Citizens’ policies or did not meet deductible requirements.
Cerio reiterated that Citizens, as a state-created, not-for-profit insurer of last resort, has no financial incentive to deny valid claims. He emphasized the organization’s commitment to paying claims promptly and credited Governor Ron DeSantis and Chief Financial Officer Jimmy Patronis for the legislative changes that helped stabilize the market.
Overall, the outlook for Florida’s property insurance market is improving, with legislative reforms playing a key role in bringing stability after years of turmoil.