CEO: Florida homeowners insurer Citizens seeing price pressure ease
State’s insurer of last resort, Citizens, successful in reducing its exposure, CEO Tim Cerio says
- Citizens Property Insurance Corp., the state-backed insurer of last resort, has seen a significant reduction in policyholders, particularly in South Florida.
- Legislative reforms in 2021 and 2022 aimed at curbing litigation are being credited for stabilizing the insurance market.
- While more competition is expected to eventually lower prices, for now, experts predict stabilization and potentially slight decreases.
Property insurance might not be getting less expensive in the Sunshine State despite recent efforts to rein in the cost, but it is getting easier to find.
The dropping number of lawsuits against insurers has made private insurers more willing to scoop up customers in the areas that have historically been harder to insure. Properties in Palm Beach, Broward and Miami-Dade counties account for the largest numbers getting moved off the state-backed Citizens Property Insurance Corp., Citizens’ officials are reporting.
The combination of fewer lawsuits and more private companies willing to take on the historically riskier tri-county area has created a “really unique” circumstance, according to Tim Cerio, Citizens’ president and CEO.
Citizens expects to no longer be Florida’s top insurer
Citizens expects to have a bit more than half the number of policyholders that it had on its books when the state’s property insurance market was in freefall, Cerio told the state-backed nonprofit’s board of governors that met Wednesday, March 12.
Citizens is the insurer of last resort, designed to insure the properties private companies deem too risky. Virtually all properties in Monroe County are backed by Citizens, and policyholders also have been concentrated in Broward, Palm Beach and Miami-Dade counties. But now, for the tri-county area, things have changed for these private companies, Cerio said.
“Companies have an appetite for these regions because the litigation is really down,” Cerio said, also naming Hillsborough and Orange counties as places where private companies are taking on the risk that Citizens has been shouldering.
Taken together, those five counties account for more than half the policyholders who have gone into private insurance, Cerio said. The 478,000 policyholders Citizens dropped in 2024 — mostly concentrated along the tri-county coast, means that Citizens won’t have to spend some $370 million in reinsurance, which is the insurance Citizens and other insurance companies buy to meet catastrophic-level claims should disaster hit.
Citizens is projecting 738,000 policyholders by the end of 2025 compared with 1.4 million in September 2023. That size will mean the state’s second-largest insurer, State Farm Insurance, will be only 15 percent smaller than Citizens if State Farm’s counts from the end of the third quarter last year hold steady.
Many claims are not turning into lawsuits
Cerio largely credited the Legislature and Gov. Ron DeSantis for the turnaround in Florida’s battered property insurance industry. Through changes to insurance regulations and tort laws passed in 2021 and 2022, much of the incentive for policyholders to file a lawsuit against their insurer in a settlement dispute has been hobbled. This past hurricane season, when three hurricanes made Florida landfall, was the first with hundreds of thousands of claims filed since those changes, but those claims are not turning into lawsuits, Cerio said.
Lawsuits against insurers peaked in 2021 with nearly 100,000, according to Cerio’s presentation. In 2024, property owners filed 57,120 lawsuits against their insurer, the lowest it’s been since 2017.
“Trends are moving in a very positive direction in terms of claims that actually enter into litigation,” Cerio said.
The legislative changes, Cerio said, “have made a tremendous, tremendous impact.”
Currently, though, the backlash to the fewer options for policyholders has spurred bills that would wind back some of those changes. The House version of one of those bills had its first hearing Thursday, March 13.
Still, decreasing the number of policies the state-backed insurer carries has long been a goal so the state’s exposure to losses in a disaster is reduced. That’s because too many claims against Citizens could cost every insurance policyholder.
Citizens can levy a surcharge on every insurance policy in the state if the catastrophic claims of Citizens’ policyholders deplete the nonprofit’s reserves too far, as happened after the 2004-2005 hurricane seasons when a series of storms hit the state.
Ryan Papy, president of Keyes Insurance, based in Miami, said he’s seeing the same interest in the tri-county from carriers that Cerio discussed. But he’s not expecting that Florida will stop being one of the most expensive places to insure property in the country.
“We are seeing a lot more options, and over time, options will lead to better prices,” he said. “Right now, though, the best we can hope for is that they (prices) stabilize and maybe go down a little bit.”
What’s up with claims for hurricanes Helene, Milton, Debby
The audit committee of the Citizens’ Board of Governors also heard updates about how claims from the 2024 storms that all hit the state’s Gulf Coast are getting digested. As of Dec. 31:
∎ Hurricane Milton, which made landfall in October as a Category 3 storm, has cost Citizens $2.07 billion to investigate, manage and settle insurance claims, which was “a significant reduction” from the $3.89 billion the storm models were predicting.
∎ Hurricane Helene, which hit in September as a Category 4 storm, has cost Citizens $315 million, which was also less than models projected.
∎ Hurricane Debby, which hit in August as a category 1 storm, has cost Citizens $76.5 million.
None of the storms had losses large enough to trigger payments from the insurance that Citizens purchases, called reinsurance, that insures the nonprofit company’s catastrophic losses, Citizens officials said.
Anne Geggis is the insurance reporter at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at ageggis@gannett.com. Help support our journalism. Subscribe today