Citizens Insurance plans to cut premiums next year. Will that lead to fewer takeouts?

"Several private market insurers have already announced significant rate decreases that could drive down renewal premiums for their customers. Others are likely to follow, driven by the same market factors behind the Citizens reductions: fewer lawsuits since tort reforms were enacted in 2022 and 2023, and decreases in the cost of reinsurance that Florida insurers must buy to ensure they can pay all claims after a catastrophe."

"But will insurers who participate in efforts to reduce Citizens' policy count - by "taking" policies out of Citizens - reduce their premiums to stay within 20% of Citizens' estimated renewal cost? If they don't - or can't if reductions aren't supported by their next rate filing - then those takeout customers will be allowed to remain with Citizens, and some who have already been depopulated will be entitled to return."

"Citizens recently recommended reducing rates by 2.6% statewide, while South Florida policyholders are expected to see average rate reductions of at least 11% for coverage of single-family homes and at least 6.8% for multiperil condo unit coverage. Citizens' reductions, a result of cost savings from reforms enacted by the Legislature and governor in 2022 and 2023, would reduce premiums for new and renewing policies in many parts of the state by hundreds of dollars beginning on July 1, if state insurance regulators approve."

Citizens Property and Casualty Insurance Corp. is seeking to reduce premiums in South Florida and elsewhere, driven by tort reforms and lower reinsurance costs. Several private insurers have already announced meaningful rate decreases and more may follow. Insurers that 'take' policies from Citizens must keep rates within 20% of Citizens' estimated renewal cost or risk allowing customers to remain or return to Citizens. Citizens recommended a 2.6% statewide rate cut; South Florida single-family policies could drop at least 11% and condo unit multiperil coverage at least 6.8%, effective July 1 if regulators approve. Policy movements affect Citizens' downsizing plans.

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