Citizens Property Insurance Corp., a state-run "insurer of last resort" for property owners in Florida, is set to shift up to 26,000 policies to private insurance firms this summer. This strategic move comes as an attempt to manage its rapidly expanding customer base, which recently swelled to 1.3 million policies.
State regulators have given the green light to proposals by Slide Insurance Co. and Loggerhead Reciprocal Interinsurance Exchange. Slide Insurance is set to assume responsibility for up to 25,000 policies, while Loggerhead will take on approximately 1,000, commencing this August.
The past two years have seen a significant uptick in policies under Citizens, primarily due to private insurers raising premiums, dropping customers, and in some instances, going insolvent due to fiscal challenges.
State officials have long been advocating for the transfer of policies from Citizens to the private sector. This strategy aims to mitigate the potential financial risks posed to the state by a major hurricane event.
A law passed last December now mandates Citizens policyholders to accept coverage offers from private insurers, as long as the proposed premiums are within 20% of the current cost of Citizens' rates. This legislative shift was approved due to the observed trend of Citizens often charging lower rates than its private counterparts.
