Understanding Florida’s Insurance Dilemma: Citizens Property Insurance’s Proposed Rate Hike

In a recent update that concerns many Floridians, Citizens Property Insurance, the state-run insurer of last resort, is seeking approval to increase insurance rates by 14%. This proposed rate hike, driven by several factors, aims to stabilize the insurance market and reduce the number of policies under Citizens. As Floridians brace for potential changes, it’s essential to understand the backdrop of this proposal, its implications, and the broader context of Florida’s insurance landscape.

Citizens Insurance board backs rate hike proposal – Fox 13 Tampa Bay

The Role of Citizens Property Insurance

Citizens Property Insurance was established as a safety net for homeowners who could not secure insurance in the private market. Initially designed to serve as the insurer of last resort, Citizens has grown into the largest insurer in Florida, covering approximately 1.2 million policies. This expansion is attributed to the challenges and volatility within the private insurance market, which has seen insurers cancel policies and increase rates due to consecutive active hurricane seasons and rising reinsurance costs.

The Rate Hike Proposal

The Citizens Board of Governors recently approved a proposal for a 14% rate hike, which will now be reviewed by the Florida Office of Insurance Regulation. If approved, this increase will mark the second double-digit rate hike for Citizens in recent years. The primary goal of this rate hike is to make Citizens less competitive compared to private insurers, thereby encouraging more policyholders to transition back to the private market.

Depopulation Strategy

Citizens has been actively pursuing a depopulation strategy, which involves reducing its policyholder base by transferring policies to private insurers. This strategy has seen some success, but the sheer number of policies under Citizens indicates that more needs to be done. The proposed rate hike is a critical component of this strategy, as higher rates are expected to make private insurance options more appealing to consumers.

Challenges in the Private Market

The private insurance market in Florida has been under significant strain due to several factors. Active hurricane seasons have resulted in substantial claims payouts, increasing the financial burden on insurers. Additionally, rising reinsurance costs and a surge in litigation have further complicated the situation. These challenges have led to higher premiums and, in some cases, insurers exiting the market altogether.

Despite these challenges, there are signs of stabilization within the private market. Mark Friedlander of the Insurance Information Institute notes that rate increases in the private market are running lower this year, indicating a healthier market. As private insurers adjust their rates to more moderate levels, the proposed hike by Citizens aims to align its rates with market realities and encourage a shift back to private insurance.

Impact on Policyholders

For policyholders, the proposed rate hike could mean a significant increase in their insurance costs. While Citizens aims to keep its rates actuarially sound, meaning they reflect the true cost of providing coverage, the 14% cap set by state law limits how much they can increase rates at one time. However, without this cap, Citizens would need to raise rates by 38% to match private market levels.

This disparity highlights the financial challenges faced by Citizens and underscores the importance of the proposed rate hike in achieving a more balanced insurance market. Policyholders who remain with Citizens may see their premiums rise, but those who transition to the private market could potentially find more competitive rates, depending on their specific circumstances.

Future Outlook

The future of Florida’s insurance market hinges on several factors, including regulatory decisions, market conditions, and the ongoing impact of climate change. The Florida Office of Insurance Regulation will play a crucial role in determining the outcome of Citizens’ rate hike proposal. If approved, this increase could set a precedent for future rate adjustments and signal a shift towards a more stable and competitive market.

Furthermore, efforts to mitigate the impact of natural disasters through improved building codes, better risk management practices, and enhanced resilience measures will be vital in ensuring the long-term viability of Florida’s insurance market. As the state continues to grapple with the challenges posed by its unique geographic and climatic conditions, the balance between affordability and sustainability will remain a key consideration for policymakers and insurers alike.


Citizens Property Insurance’s proposed 14% rate hike is a significant development in Florida’s ongoing insurance saga. As the state-run insurer of last resort seeks to reduce its policyholder base and stabilize the market, this proposal highlights the complex interplay between public and private insurance options. For Floridians, the decision by the Florida Office of Insurance Regulation will have far-reaching implications, influencing not only their insurance premiums but also the overall health of the state’s insurance market. As stakeholders await the outcome, the need for a balanced approach that ensures both affordability and sustainability remains paramount.

Schedule an appointment now!

If you’re a homeowner in Florida, now is the time to take proactive steps to potentially lower your insurance premiums. Schedule a comprehensive home inspection to identify areas where you can improve your property’s resilience to natural disasters. Many insurance companies offer discounts for homes that meet certain safety standards, such as fortified roofs, storm shutters, and updated electrical systems. By investing in these upgrades, you not only protect your home but also position yourself to take advantage of lower insurance premiums. Contact us today and explore the options available to make your home safer and your insurance more affordable.