Citizens Property Insurance Corp. saw its policy count dip to 777,592 last Friday—the lowest total for this time of year since June 2021—as Florida’s state-run insurer continues efforts to shrink its footprint and return to its original role as an insurer of last resort.

The drop is part of a broader “depopulation” initiative designed to shift policyholders back into the private market. Just a week earlier, Citizens had more than 820,000 policies. Despite a temporary slowdown expected during hurricane season, company officials project the count will drop below 654,000 by year’s end.

“Our policy count is going to creep up now, during the hurricane season,” said Citizens President and CEO Tim Cerio on Wednesday. “But once the takeouts resume in the fall, we should be, hopefully, just under 654,000 policies.”

Citizens ballooned to more than 1.4 million policies in 2023 as private insurers struggled financially, dropping customers and hiking rates. But recent improvements in the insurance market—fueled by legal reforms passed during a 2022 special legislative session—have allowed private carriers to reenter and reclaim policies.

“The recovery is there,” Cerio said. “You’re seeing more competition, and that promotes a smaller Citizens, which is good for Floridians.”

However, critics argue the 2022 reforms went too far in favoring insurers. The law eliminated Florida’s one-way attorney fee system, which previously required insurers to pay a policyholder’s legal fees if the homeowner won a lawsuit over a denied claim. A House proposal this spring aimed to reinstate balance through a “loser pays” system, but it failed in the Senate.

“We made it too easy for insurers to delay, deny, and underpay claims,” said House Majority Leader Tyler Sirois in April.

As private insurers return to the market, Citizens’ depopulation program has been ramping up. Last week, state regulators approved three companies—Patriot Select, Mangrove Property, and Slide Insurance—to take over Citizens policies. Under state law, policyholders must accept private offers within 20% of their current Citizens premium, even if it means paying more.

Meanwhile, Citizens customers also face rate hikes approved earlier this year.

Board member Charlie Lydecker acknowledged that while the system has stabilized due to reforms, the real relief for homeowners will come when premiums level out.

“I don’t think the credit’s going to be felt amongst our customers until rates flatten,” Lydecker said. “And that should be our goal.”

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(Image credit: Florida Weekly)

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