Citizens Property Insurance Corporation, Florida’s state-backed insurer of last resort, has seen its policy count fall below one million for the first time in over two years—largely due to private companies selecting its most attractive policies.

After a volatile hurricane season, Citizens has transferred nearly 500,000 policies to private insurers since January 2024. While that might seem like a positive sign for the market, industry insiders say the process allows private carriers to “cherry-pick” the safest and most profitable policies—leaving Citizens with the riskiest, costliest coverage.

“Five years ago, the average homeowners premium in my book of business was under $1,000,” said Steve Gensolin, owner of Little Star Insurance in Central Florida. “Now it’s probably over $4,000. The pace of change has been staggering.”

Citizens says its average policy premium is around $3,500—roughly 20% less than what private insurers charge. But despite efforts to reduce its footprint, Citizens remains Florida’s largest home insurer, often serving those who have been dropped or priced out of the private market.

The depopulation trend has sparked concern because of how selective private insurers can be. They often target homes under five years old or with roofs less than a decade old—data that’s readily available when browsing Citizens’ book of business.

“Each company sets its own criteria,” said Citizens spokesperson Michael Peltier. “Some look for newer construction, some want recently replaced roofs. We want them to take a mix—including the riskier policies—but that’s not always happening.”

So far in 2025, Citizens has gained nearly 55,000 new policies—but lost over 125,000 either to depopulation or policyholders switching voluntarily. Critics argue this transfer of “safer” policies allows private companies to shed their own higher-risk clients, effectively dumping those back onto Citizens.

State Rep. Anna Eskamani called the practice “discriminatory” and counter to free market principles. “It allows companies to cherry-pick the people they want to insure while dropping others without notice—leaving Citizens to absorb the risk.”

Former State Rep. Scott Plakon agreed the situation merits closer scrutiny. “There may need to be legislative changes that give the Office of Insurance Regulation more authority to review these practices.”

If Citizens becomes overwhelmed by high-risk claims, the financial burden could fall on all Floridians. The company has the authority to assess surcharges statewide if it can’t cover losses—raising the stakes for everyone.

Gensolin put it bluntly: “If we drain Citizens of the good policies and refill it with high-risk ones, we’re sitting on a financial time bomb.”

Although three companies—Lexington Insurance, Bankers Insurance Group, and Farmers Insurance—have exited the Florida market since 2022, state officials note that 12 new property insurers have entered the market in that same period. Still, the concern remains: how those companies operate once inside the market will shape Florida’s insurance future.

Follow the St. Pete-Clearwater Sun on Facebook, Instagram, Threads, Google, & X

(Image credit: Amy Green/WMFE)

PIE-Sun.com: local St. Pete-Clearwater news