Despite a tumultuous year marked by three hurricanes, Florida’s property insurance market is showing signs of recovery, according to Tim Cerio, President and CEO of Citizens Property Insurance Corp.
Cerio attributed the positive trend to recent legislative reforms, stating that they “brought the insurance market back from the brink of collapse.” These reforms, enacted in 2022 and 2023, aimed to stabilize the market by addressing issues such as excessive litigation and rising reinsurance costs.
One key change was making it more difficult for homeowners to sue insurers over claims, a move intended to curb frivolous lawsuits. As a result, several insurance companies have filed for rate decreases or maintained stable rates this year, and many reported net profits in 2023 after years of losses.
Another positive development is the success of the “depopulation” program, which encourages private insurers to take over policies from Citizens, the state-backed insurer of last resort. Citizens saw its policy count drop below 1 million last month and is projected to reach 907,000 by year-end.
“We are seeing less new business come in because the market is getting healthier,” said Cerio. “We’re certainly moving in the right direction.”
This reduction in Citizens’ policy count is crucial for mitigating the financial risk to the state in the event of a major hurricane. A smaller Citizens means less exposure and a lower likelihood of assessments being levied on policyholders across the state to cover potential shortfalls.
Cerio praised Governor Ron DeSantis and Chief Financial Officer Jimmy Patronis for championing the legislative reforms, emphasizing their significant role in stabilizing the insurance market.
While challenges remain, these positive developments offer hope for a more stable and affordable property insurance market in Florida. The success of the reforms and depopulation efforts indicates that the state is on the path to recovery, bringing much-needed relief to homeowners.