Citizens’ Depopulation Program pressures homeowners toward private insurers, leading to increased costs and limited alternatives
As Citizens Property Insurance Corporation executes a large-scale “depopulation” effort, many Florida homeowners are struggling with limited and expensive options for home insurance. Citizens, established by Florida lawmakers as a final option for homeowners who cannot secure private insurance, has grown substantially over the years, primarily as private insurers faced financial challenges and began dropping customers. To address the state’s growing dependence on Citizens, Florida regulators approved a program allowing private insurers to take on Citizens’ policies. Yet for residents, this shift often results in higher premiums and fewer benefits.
Citizens initially aimed to fill coverage gaps when private insurers were unable to offer affordable options. However, as the citizens' customer base surged from around 400,000 policies in 2019 to over 1.2 million by late 2024, the state intervened. Nearly 370,000 policies have already been moved to private insurers this year alone, adding financial pressure on homeowners, especially those with limited incomes. In a state where home insurance costs are already among the highest in the nation, residents now face higher premiums with private insurers and, in many cases, reduced coverage.
The strain on policyholders as costs surge
Under the Citizens’ depopulation program, policyholders can retain their coverage only if alternative insurance offers exceed their current premium by at least 20%. When new private-market premiums are less than 20% above Citizens' costs, homeowners must accept them, leaving many residents, particularly retirees, struggling to afford the rising rates.
Some residents, particularly those on fixed incomes, feel they have no viable choice but to pay higher costs for fewer benefits. Currently, Florida homeowners pay an average of $5,527 for a $300,000 home in insurance premiums—significantly higher than in neighboring states, where costs are closer to $2,000. In specific parts of Florida, premiums can even reach $8,000 or more annually, hitting hardest for retirees and those on fixed budgets.
Limited choices and concerns over transparency
While some Floridians find alternative policies through private insurers, others are concerned about the lack of choice when selecting a provider. Many are automatically transferred to insurers selected by Citizens based on specific criteria like property characteristics or location. Citizens argue that this program will ultimately benefit the state by reducing risk, as private insurers absorb more policies. The Florida Office of Insurance Regulation also assures residents that participating insurers undergo financial stability checks, which it hopes will improve the state's insurance market over time.
However, the transition has not been smooth for many policyholders, who often find their new policies offer less coverage despite higher premiums. This has led some homeowners to feel their financial freedom is restricted by the limited control over their insurance choices.
Despite assurances from state authorities that the Citizens’ depopulation program is a necessary step to strengthen Florida’s insurance sector, many policyholders are left to navigate the complexities of this process on their own. As residents search for affordable coverage, many are advised to consult their brokers for personalized advice on making the best choice among limited options. For potential homebuyers, rising insurance costs are becoming a significant consideration, adding to the financial challenges of purchasing in the state.
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