Answers to your questions about Citizens Insurance

Article Courtesy of The Orlando Sentinel

By Susan Jacobson

Published November 13, 2015


At its peak in 2012, Florida's property insurer of last resort had 77,028 residential policies in Central Florida, the bulk in coastal Brevard and Volusia counties.

By the end of September, state-controlled Citizens Property Insurance Corporation's portfolio in the region had plunged to 20,644 Central Florida policyholders, a 73 percent drop.


The drastic reduction is part of a state effort to push people off the rolls of the company that remains the largest property insurer in Florida. The stated purpose is to reduce the risk to taxpayers in the event of another catastrophic hurricane.


But even as Florida enjoys its 10th year without being struck by a major storm, Citizens isn't going away. It still will be available for homes and businesses that private companies won't insure.

Q: What percentage of homeowners in Central Florida are insured by Citizens?

A: The corporation had 2 percent of the residential market in Brevard and 3 percent of the market in Volusia as of June 30. The shares in Orange, Osceola, Seminole and Lake counties were less than 0.3 percent each. In the past year alone, Citizens shed more than 36,000 policies in Central Florida.

An aerial view of Hurricane Charley damage from 2004.


 Q: When and why was Citizens created?

A: The nonprofit, tax-exempt corporation was formed in 2002 to provide property insurance to Floridians who couldn't get coverage elsewhere a problem that mushroomed after the disastrous hurricane seasons of 2004 and 2005 that brought half a dozen major storms to the state, saddling Citizens with a deficit of more than $1.7 billion.

Citizens reached a peak of nearly 1.5 million policyholders statewide in 2012, or more than one-quarter of the Florida market, before efforts began in 2013 to encourage policyholders to find coverage through private companies. Citizens currently holds about 574,000 policies. "The government should not be competing with the private sector for anything," said Orlando insurance agent Tom Cotton. "It should be a market of last resort."

Q: Why is it a good idea to encourage policyholders to move from Citizens to private insurance?

A: Citizens often offers policies with more restrictive coverage and fewer options than private companies, according to the Property Insurance Clearinghouse, which helps homeowners find private insurance instead of relying on Citizens. Homeowner Graham Myers of Orange County said Citizens' rates were cheaper than his current policy with a private company, but Citizens offered fewer coverages and had high deductibles. "It felt like half a policy," he told the Orlando Sentinel.

It also reduces the risk for taxpayers in the case of another catastrophic storm. That's because all Florida insurance policies, not just those for property, are charged an assessment to cover Citizens claims from a major hurricane. That surcharge was lifted only recently.

Q: How do Citizens' rates compare with those of private insurers?

A: It depends on the individual property, but the Office of Insurance Regulation in September approved 2016 rates that generally will be slightly lower than this year's for inland locations such as Metro Orlando and higher for coastal areas and South Florida. Current homeowners don't have to leave Citizens unless a private company offers premiums that are the same or less. New customers must accept a private insurer if its premiums are up to 15 percent higher than Citizens' rates.

Homeowners have more options now that smaller insurance companies are writing more policies, encouraged by the decade without a severe hurricane, growing surpluses and affordable rates for reinsurance, which is insurance for insurance companies. "It's a healthier marketplace when consumers have choice," said Dave Newell, director of education for the Florida Association of Insurance Agents. "It means the private market is working."

Q: Will the private-insurance market be able to handle claims if another catastrophic hurricane hits Florida?

A: No one knows for sure, but a recent report by the Florida Office of Insurance Regulation was optimistic. All 67 insurance companies evaluated passed a "catastrophe stress test." The report concluded that the results are "encouraging" and the financial strength of Florida-based property insurers is "promising."

Q: How can consumers check out an insurer?

A: Florida's insurance consumer advocate, Sha'Ron James, advises people to work closely with an agent, ask questions of Citizens and contact the company offering new coverage. To file a complaint with the state, go to or call 877-693-5236.