Citizens Insurance, the state-backed property insurance firm originally intended to serve as a ‘last resort’ option for Floridian homeowners, ended May with 883,333 policies, a 45 percent year-over-year increase as the agency continues to add thousands of new policies per week.
The proliferation of new customers comes as a result of Florida’s presently feeble insurance market, worsening to such a level that Gov. Ron DeSantis held a special session in May.
The Florida Legislature convened at the Capitol to provide relief to homeowners battling skyrocketing insurance costs. Florida lawmakers, during a three-day special session, passed legislation (SB 2B) to alleviate rising insurance costs, increase insurance claim transparency, and crack down on frivolous lawsuits.
Despite new policy put into place, Citizens Chief Operating Officer Kelly Booten remains wary of positive change arriving soon.
“This is one of those stories that, unfortunately, the news is not getting better with time,” said Booten.
Notably, lawmakers during the special session did not make changes designed specifically to address issues such as Citizens’ growth and premiums, though parts of the overall legislation will affect Citizens like it does other insurers.
While Citizens taking on more customers is not inherently a bad thing, it further reflects a general hesitance expressed by the populace to buy into private insurance that may be susceptible to sudden price hikes or offer uncertain coverages.
Sen. Jeff Brandes, who was among the first to call for a property insurance special session, continues to press the issue, claiming that over 80,000 homeowners cannot find insurance aside from Citizens Property Insurance.
“The simple truth is if Citizens were a regular insurance company, we would never have let it grow as fast as it did,” Brandes said.
The financial-rating agency AM Best in the weeks leading up to the special session said that “further action is essential” to stabilize Florida’s property insurance market.
The agency issued a four-page commentary that described a slew of problems for insurers, such as high reinsurance and litigation costs, and pointed to companies seeking hefty rate increases and reducing the number of policies they write.
“Insurance industry leaders in Florida have been warning that the current environment for those offering personal property coverage is on shaky ground, given the state’s risks and litigiousness,” the commentary said. “Escalating losses have prompted advocacy groups to call for legislative reform to stabilize the insurance market. Growing support led to legislation introduced in 2019 and again in 2021 aimed at lowering the runaway costs of litigation, a key driver of operating losses, but reform has not achieved the desired effect. Further action is essential to stabilize the market.”