Two narratives over the last few days underscore that Florida’s property insurance market is a complex beast, prone to rapid changes and ever-shifting fortunes. On one hand, we have claims that the market is making a significant recovery. On the other hand, Citizen’s Insurance policy count ticked upward last week, a sure sign that progress isn’t always linear. And the big question lurking over the horizon like a Gulf hurricane: is the market truly better, or are we just riding a streak of hurricane luck?

Citizens Property Insurance Corporation, the state-backed “insurer of last resort,” saw its policy count tick upward last week to 989,306, a small increase from the week prior. This comes despite a concerted effort to shrink Citizens’ footprint through a “depopulation” program, which shifts policies to private insurers.

After ballooning to a high of 1.412 million policies in 2023, Citizens’ numbers have been steadily declining, even dipping below the 1 million mark in November. But if the goal is to reach 907,000 policies by year-end, which is mere weeks away, how are we getting there when we’re moving in reverse?

If Citizens’ reserves are depleted after a catastrophic storm, all Florida policyholders—not just those insured by Citizens—could face “assessments” to cover the shortfall. Those “assessments” show up on your property insurance bill, no matter what insurer provides your coverage.

Obviously, the steady reduction in Citizens policies means there are fewer homes at risk that could trigger the assessment clause. A lower policy count at Citizens also signals a healthier market overall, because homeowners are finding coverage in the private sector. But a sudden increase, however slight, begs the question: is the private market ready to shoulder more risk, or is this a sign of some persistent underlying issue?

On the flip side, private insurers seem to be enjoying a much-needed breather. Citizens CEO Tim Cerio reported last week that legislative reforms passed in 2022 and 2023 have begun to stabilize the property insurance market, which had been teetering on the edge of collapse, with a number of insurers leaving, or threatening to leave the state. Among the reforms passed over the last few years is a controversial measure that curtails policyholders’ ability to sue insurers over claims disputes – a move praised for curbing frivolous litigation, but criticized for limiting consumer rights.

Still, the numbers are encouraging: 15 insurers filed for rate decreases this year, while others sought zero-percent increases. Many companies also reported lower costs for reinsurance and even turned a profit in 2023 after years of losses. Cerio confidently declared that Florida’s market is “moving in the right direction,” citing increased appetite from private insurers to take on policies, even in high-risk areas like Broward and Miami-Dade counties.

Yet, it’s hard to ignore an elephant in the room: Florida has been spared from major hurricanes in the past two years. That luck is unlikely to hold indefinitely.

The juxtaposition of these two narratives paints a sobering picture. Yes, legislative reforms have provided breathing room for insurers, and depopulation efforts are chipping away at Citizens’ dominance. But the uptick in Citizens’ policies—albeit slight—suggests that Florida’s private market may not be as robust as it seems.

A bad hurricane season could upend this tenuous progress. Citizens has already paid over $516 million in claims from three hurricanes this year, and while those storms were significant, they pale in comparison to a major catastrophic event like Hurricane Andrew or Irma. If a storm of that magnitude were to hit, the financial exposure of both Citizens and private insurers would be tested like never before.

Moreover, critics argue that the market’s recent stability may owe more to Florida’s hurricane-free streak than to any legislative fixes. Reforms like restricting litigation undoubtedly reduce costs, but they don’t address the underlying challenge: Florida’s geographic vulnerability to hurricanes means that insuring property here is always inherently risky.

There’s no denying that Florida’s property insurance market is in better shape than it was two years ago. Legislative reforms have helped stabilize the private sector, and Citizens is no longer ballooning unchecked. But the market’s foundation remains shaky, and a single bad storm season could bring a devastating setback.

In the end, Florida’s insurance market isn’t out of the woods yet. The true test will come not in boardroom reports or policy filings, but in how Florida’s market weathers the next bad hurricane season. Until then, any celebration of progress should come with a healthy dose of caution—and a watchful eye on the skies.