Will you lose your Citizens insurance policy? What to know about possible changes

Jeff Kleinman
·2 min read
23

Citizens Property Insurance Corp. is the insurer of last resort for thousands of Florida property owners. But now the state-backed company is shedding some policies.

Here’s what to know:

Is Citizens transferring policies to other companies?

Donna LaMountain, 51, surveys damage on Pine Island Road on Thursday, Sept. 29, 2022, in Matlacha, Fla. Hurricane Ian made landfall on the coast of South West Florida as a category 4 storm Wednesday afternoon leaving areas affected with flooded streets, downed trees and scattered debris.
Donna LaMountain, 51, surveys damage on Pine Island Road on Thursday, Sept. 29, 2022, in Matlacha, Fla. Hurricane Ian made landfall on the coast of South West Florida as a category 4 storm Wednesday afternoon leaving areas affected with flooded streets, downed trees and scattered debris.

What’s next: Florida is setting the stage for Citizens to transfer 26,000 policies to two private insurers, according to the News Service of Florida.

New companies: The state’s insurance commissioner signed off on Slide Insurance Co. taking as many as 25,000 policies from Citizens starting in August and Loggerhead Reciprocal Interinsurance Exchange to take as many as 1,000 policies.

Why is Citizens dropping policies?

A man moves through gulf water flowing through a broken section of Pine Island Road on Thursday, Sept. 29, 2022, in Matlacha, Fla. Hurricane Ian made landfall on the coast of South West Florida as a category 4 storm Wednesday afternoon leaving areas affected with flooded streets, downed trees and scattered debris.
A man moves through gulf water flowing through a broken section of Pine Island Road on Thursday, Sept. 29, 2022, in Matlacha, Fla. Hurricane Ian made landfall on the coast of South West Florida as a category 4 storm Wednesday afternoon leaving areas affected with flooded streets, downed trees and scattered debris.

Financial issues: Florida is an expensive state for insurers to do business. We’ve had major hurricanes, the latest Hurricane Ian last September. So Citizens, faced with explosive growth as other insurers drop customers or fail, has been looking for solutions.

Growth: Citizens had more than a million policies as of Dec. 30, 2022, up from 759,305 at the end of 2021.

Redirecting policies: State leaders have long sought to keep policies out of Citizens partly because of the risk that policyholders across the state could get hit with extra costs if Citizens can’t pay all claims after a hurricane, according to the News Service of Florida.

New law: A new Florida law paves the way for Citizens to transfer policies to private companies. Citizens policyholders are required to accept offers of coverage if they are withint 20% of what they are now paying for yearly premiums.

What is the state of property insurance in Florida?

A downed stop sign rests on a fence on the corner of Lagoon and Tarpon roads in Fort Myers Beach, next to items like a pinball machine and appliances, Wednesday, Oct. 26, 2022. The items were among tons of debris left behind in the aftermath of Hurricane Ian, which hit the area as a Category 4 storm a month earlier.
A downed stop sign rests on a fence on the corner of Lagoon and Tarpon roads in Fort Myers Beach, next to items like a pinball machine and appliances, Wednesday, Oct. 26, 2022. The items were among tons of debris left behind in the aftermath of Hurricane Ian, which hit the area as a Category 4 storm a month earlier.

Cost: Citizens says it needs more money, so in March the company voter to seek a 14% rate increase, the highest since 2009.

Reason for the increase: Hurricane Ian put a dent in Citizens’ reserves at the same time hundreds of thousands of Floridians have flocked to the insurer of last resort — a 50 percent spike in a single year — with many of those homes in vulnerable coastal areas.

Risk: A report from Citizens shows that if a 1-in-50-year storm were to occur this hurricane season, Citizens could face a $1.5 billion budget shortfall.

What to know about the new private companies

A mass of shrimp boats and recreational vessels is piled on docks on San Carlos Island in Fort Myers Beach Wednesday, Oct. 26, 2022. The large boats were wrecked and displaced during Hurricane Ian, which hit the area as a Category 4 storm Wednesday, Sept. 28, 2022.
A mass of shrimp boats and recreational vessels is piled on docks on San Carlos Island in Fort Myers Beach Wednesday, Oct. 26, 2022. The large boats were wrecked and displaced during Hurricane Ian, which hit the area as a Category 4 storm Wednesday, Sept. 28, 2022.

Slide Insurance Co.: Based in Tampa. ... Successfully completed its reinsurance program for the 2023 hurricane season, according to Yahoo Finance .... Recognized as a 2023 Tampa Bay Business Journal Best Place to Work. Launched in 2022 by an executive of Tampa’s Heritage Insurance ... Bought more than 91,000 policies from UPC Insurance, according to the Tampa Bay Times.

Loggerhead Reciprocal Interinsurance Exchange: Based in Tampa ... Founded in 2022 by two former auto executives ... Named after the sea turtle ... Reciprocal insurance exchanges work as people and businesses exchange insurance contracts and spread the risks. Policyholders are known as subscribers.

A sailboat sits in the mangroves on Sugarloaf Key Thursday, Oct. 27, 2022. It is one of more than 100 boats that were displaced when Hurricane Ian went by the Florida Keys Tuesday, Sept. 27, 2022.
A sailboat sits in the mangroves on Sugarloaf Key Thursday, Oct. 27, 2022. It is one of more than 100 boats that were displaced when Hurricane Ian went by the Florida Keys Tuesday, Sept. 27, 2022.