Florida's insurer of last resort surpasses 1 million policies
The state-backed Citizens Property Insurance Corp. has surpassed 1 million policies for the first time since 2014. Created as an insurer of last resort, Citizens has been absorbing a flood of policies as private insurers drop customers and push for large rate increases because of financial losses.
The Citizens website on Thursday showed it had 1,000,624 policies as of Aug. 5, up from 937,835 policies on July 8.
Citizens President and CEO Barry Gilway said the insurer could reach 1.2 million policies by the end of the year as many private companies are not writing coverage. “The market is probably 75 percent shut down,” Gilway told the Citizens Board of Governors on July 13. “(There are) very, very few companies that are really open in the marketplace.”
Citizens had 883,333 policies at the end of May. As longer-term illustrations of the growth, Citizens had 661,150 policies on June 31, 2021, and 486,773 policies on July 31, 2020, according to data on its website.
State leaders have long sought to limit the size of Citizens because of potential financial risks if Florida is hit by major hurricanes. If Citizens does not have enough money to pay claims after a disaster, it can collect additional money from policyholders throughout the state --- a process known as collecting assessments.
“Citizens Insurance topping the 1 million policy mark signals a market that is teetering, putting millions of Floridians and local businesses at risk of even higher costs in the form of hurricane taxes,” Florida Chamber of Commerce President and CEO Mark Wilson said in a statement Thursday, likening assessments to taxes.
Gov. Ron DeSantis called a special legislative session in May to address the property-insurance system, but problems have persisted. In all, five private insurers have been declared insolvent since February, with Weston Property and Casualty Insurance the latest to be placed into receivership.
Citizens topped 1 million policies after the 2004 and 2005 hurricane seasons in which seven storms made landfall in Florida. But Citizens hadn’t been above 1 million policies since February 2014.