Citizens Insurance Rate Hike Proposed

TALLAHASSEE — While saying Florida’s insurance market is improving, the Citizens Property Insurance Corp. Board of Governors on Wednesday backed a proposal that would lead to customers across the state seeing double-digit rate increases in 2025.

The proposal, in part, would lead to an average 13.5% rate increase for the most-common type of Citizens policy, known as homeowners’ “multi-peril” coverage. Condominium-unit owners would see an average 14.2% increase.

Across all personal lines of insurance — a category that includes policies for homeowners, condominium-unit owners, renters and mobile homes — the average increase would be 14%.

The proposal will go to the state Office of Insurance Regulation for review and potential approval. Actual increases for customers would vary based on factors such as where properties are located. A state law will cap increases at 14% for primary residences and 50% for non-primary residences, such as second homes.

Rate hikes would have far-reaching effects, as Citizens is the largest insurer in the state, with about 1.2 million policies. In some parts of Florida, residents say they have few — if any — alternatives for coverage.

Also, Citizens policyholders have seen rate increases in the past. As an example, information presented during Wednesday’s meeting said regulators approved an average 12.6% increase for homeowners’ multi-peril and wind-only policies that took effect this year.

Brian Donovan, chief actuary for Citizens, said the insurance market has seen “drastic improvements” during the past year, after lawmakers passed an overhaul that included curbing lawsuits against insurers. But Citizens officials also say the state insurer often charges lower rates than private insurers, reducing the incentive for homeowners to shift to the private market.

State leaders have long sought to hold down the number of Citizens policies, in part because of financial risks if Florida gets hit by a major hurricane or multiple hurricanes. But the number of policies soared in recent years as private insurers dropped customers and raised rates because of financial problems.

Citizens reached as many as 1.412 million policies in fall 2023 before seeing reductions because of what is known as a “depopulation” program designed to shift policies into the private market. It had 1,202,696 policies as of Friday, according to data posted on the Citizens website.

The depopulation effort likely will be on hold during the next few months, as private insurers look to avoid taking on more risks during hurricane season. But Citizens President and CEO Tim Cerio said Wednesday new estimates show that Citizens could have fewer than 1 million policies by the end of the year.

“Hopefully, October, November, December will be very active (for depopulation),” said Jennifer Montero, Citizens chief financial officer. “That’s the expectation.”

Citizens board member Charlie Lydecker pointed to signs that Florida is creating a “potentially more stable marketplace.”

“Our real dream is depopulation and reduced rates,” he said.

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