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As Florida continues to be pummeled by hurricane season, the state’s largest insurer is in the process of transferring thousands of policies to private insurers as a result of surging demand.
Citizens Property Insurance Corporation was created by the Florida Legislature in 2002 to provide insurance to eligible property owners in Florida who have been unable to find insurance coverage in the private market. The provider has become the largest insurer in the state.
Because of the outsized demand the insurer has faced in recent years, regulators approved proposals to allow private insurers to take over policies from Citizens through a “Depopulation Program,” Newsweek reported. At the beginning of August, Insurance Commissioner Michael Yaworsky signed an order that lets 10 private insurance carriers adopt 413,808 policies from Citizens starting in late October. Then, just within the last few weeks, Yaworsky approved an additional 235,035 policies to be handed over starting in November, according to Florida Politics.
As private insurers have dropped customers and raised rates in the last few years in response to a growing number of natural disasters in the state, Citizens’ number of subscribers has ballooned. The insurance provider had over 1.25 million policies active as of August 2024, up from 420,366 active policies in August 2019.
“Citizens is committed to helping its policyholders find coverage in the private market,” the company’s website says. “As required by Florida law, Citizens’ Depopulation Program matches Citizens policyholders with insurance companies interested in removing their policy from Citizens and providing private-market coverage for their policy.”
The transition comes on the heels of Hurricane Helene, which hit Florida and several other states along the East Coast at the end of September, and whose death toll has now surpassed 200.
As of Oct. 4, more than 91,000 claims had been made by homeowners and businesses in the wake of Hurricane Helene, according to data from the Florida Office of Insurance Regulation, 45,225 of which were for residential properties. Thus far, 1,842 of those residential claims have been closed with a payment, while 3,582 have been closed without a payment. Nearly 40,000 residential claims are still open.
The news also comes as Florida prepares for the landfall of Hurricane Milton, which is expected to hit the state on Wednesday evening with heavy rainfall and powerful winds. Less than 48 hours after forming in the Gulf of Mexico on Monday, the storm had strengthened to a category 5 hurricane.
Home insurance rates in Florida are some of the priciest in the country. The average annual insurance cost for a home valued at $300,000, as of October 2024, is about $5,527, according to Bankrate, compared to $2,071 for a similar home in Georgia or $2,745 in Alabama.
Meanwhile, the devastating impact of Helene has made nearly one-third of young adults in the U.S. reconsider where they want to live in the future, according to a Redfin survey.
For this survey, Redfin is classifying those “young adults” as individuals from age 18 to 34. By contrast, only 15 percent of survey respondents 35 and older said the hurricane made them reconsider future plans of where to move.
The survey polled 1,005 U.S. adults across the country and was conducted by Ipsos on Oct. 2-3, 2024. Those surveyed were asked the question, “Which of the following apply to you after seeing/hearing about the damage caused by Hurricane Helene?” and then were given nine situations to consider.
More than 200 people have died as a result of the storm, which was the deadliest to hit the mainland U.S. in nearly 20 years, Redfin said.
“Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region’s relatively low cost of living,” said Redfin Chief Economist Daryl Fairweather.
“Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean. Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we’re starting to see that impact where people want to live — even people who haven’t experienced a catastrophic weather event firsthand.”
At the opposite end of the spectrum, 45 percent of overall survey respondents said that the hurricane has not changed how they think about their future housing options. In the South, 40 percent of survey respondents felt this way.
Nearly one-quarter (23 percent) of respondents thought that Hurricane Helene would prompt insurance premiums in their region to increase, with 32 percent of survey respondents in the South saying that this was on their mind.
Individuals in Florida who may be impacted by both Helene and impending Milton face even more complications when it comes to both dealing with storm damage and receiving property insurance benefits in the wake of multiple disasters that occur within a relatively short time of each other, according to Sill public adjusting firm.
Events like flooding, for instance, can cause long-term issues with a home’s structure, like mold growth or foundational damage, that may not be apparent for a long time after the initial event. Insurance companies will also likely want homeowners to file separate claims that distinguish what damage occurred during which storm, which can be a challenge. And it can all add up to more expensive coverage in the future.
“Additionally, filing multiple claims in a short period could lead to higher premiums or coverage limitations in the future,” a blog post on the company’s website said.
