Tens of thousands of Florida homeowners are receiving offers to switch from the state's insurer of last resort to private companies, as regulators' efforts to depopulate Citizens and stabilize the Sunshine State's property insurance market continue.

The takeout offers, which involve more than 130,000 homeowners, are for three private companies -- Slide, Patriot and Mangrove. Newsweek contacted the press teams of these three insurers for comment by email on Tuesday morning, outside of standard working hours.

Why It Matters Florida has just started recovering from a yearslong crisis that has seen home insurance premiums skyrocketing due to a combination of widespread fraud, excessive litigation, and the increased risk posed by natural disasters, made more frequent and more severe by climate change. Between 2019 and 2023, the average homeowner premium in the Sunshine State surged by nearly 60 percent, Reuters reported, as several major insurers reduced coverage in the most-vulnerable parts of the state or withdrew from it entirely. The lack of affordable options on the market forced thousands of homeowners to join the ranks of Citizens, which ballooned in size to reach a record of 1.4 million policies in 2023. The sudden growth of the state-backed insurer of last resort caused concern among regulators and lawmakers, who ordered Citizens to lower its total policy count out of fear that all Floridians would risk having to bail out the company.

A home sits partially on the road on October 13, 2024 in Manasota Key, Florida.

Should the state be hit by a disastrous extreme weather event, for example, all Florida homeowners could face extra charges to cover for Citizens if the insurer were not to have enough money to cover claims.
 

What To Know

Since 2023, Citizens has successfully transferred thousands of policyholders to private companies in a process known as "depopulation." Currently, Florida's insurer of last resort has 850,000 policies -- its lowest total in nearly three years.

This number is expected to continue dropping as more private companies are allowed by state regulators to take over Citizens' policies. Florida Insurance Commissioner Michael Yaworsky signed three orders allowing Slide, Patriot, and Mangrove to assume as many as 135,540 policies from the state's insurer of last resort.

Mangrove, the company founded by insurance veteran Stephen Weinstein and approved to enter the Florida market in January, will be able to assume 81,040 policies from Citizens in mid-June. Patriot will be able to take over 39,500 policies, while Slide will be able to assume up to 15,000 policies.

Florida homeowners who have received a letter containing an offer from one of the three companies must respond by the deadline or they will automatically be switched out of Citizens.

They do not necessarily have to respond that they want to be transferred to one of the private insurers: they can refuse the offer if it is over 20 percent of what they are currently paying with Citizens.
 

What People Are Saying

Mark Friedlander of the Insurance Information Institute previously told Newsweek: "Depopulation of Citizens has been very successful because of the improved financial health of Florida's private insurance market. The market's turnaround has been generated by legislative reform that addressed Florida's man-made risk crisis of legal system abuse and claim fraud."

Mangrove CEO Stephen Weinstein previously told WPTV about his vision for the company: "Our vision over time is to be a permanent franchise, long-term contributor to the Florida market. We'll launch in a disciplined way this year. One thing I will stress, we have aligned capital with my vision of investing in a very robust level of insurance protection."

What Happens Next

While premiums have stabilized and new insurers have been given the green light to enter the market, Florida homeowners still pay some of the highest premiums in the country. According to NerdWallet, the average cost of homeowners insurance in Florida is $2,625 per year, 24 percent higher than the national average of $2,110.

While Citizens' depopulation efforts are being hailed as a crucial step to further stabilize the Florida property insurance market, homeowners could face higher costs in the switch to private companies.

Citizens President, Executive Director and CEO Tim Cerio told a House panel earlier this month that he expects the insurer to end the year with fewer than 771,000 policies.

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