Florida Governor Ron DeSantis announced Wednesday that most homeowners in Miami-Dade and Broward Counties who have policies with the state's insurer of last resort, Citizens Property Insurance, will see their premiums go down this year.
Why It Matters
Property insurance premiums have skyrocketed in Florida over the past few years, as insurers facing a combination of excessive litigation, widespread fraud, and the growing risk posed by more frequent and more severe extreme weather events cut coverage or withdrew from the state entirely.
This left Florida homeowners scrambling to find coverage, while premiums across the state increased.
What to Know
Many who failed to find insurance in the traditional market only obtained policies through Citizens, which has ballooned in size over the past few years. At its peak, in September 2023, the insurer of last resort held 1.4 million policies.
Citizen's enlarged size caused concerns among experts and lawmakers over what would happen should the state-back insurer face enormous claims following a catastrophic weather event.
Efforts in recent months to bring new insurers into the Florida market and depopulate Citizens, passing its policies to private companies, have been successful: by December, the insurer policy count was below 1 million.
According to DeSantis' announcement on Wednesday, 73 percent of homeowners in Miami-Dade who have a policy with Citizens will see their premiums drop by an average of 6.3 percent. In Broward, 52 percent of policyholders will see a 4.5 percent decline.
The premium cuts came as a surprise after Citizens' board decided to seek an overall 14-percent rate increase in June last year—the maximum hike permitted to the corporation under Florida law. The request was submitted for approval to Florida regulators.
With such an increase, Miami-Dade policyholders would have seen their premiums go up from an average of $5,113 to $5,804, as reported by the Tampa Bay Times. In Broward, the average premium would have gone from $5,385 to $6,112. Instead, policyholders in the two counties are going to see significant cuts.
While Citizens CEO Tim Cerio told lawmakers on Tuesday that the insurer wasn't seeking premiums cuts, as reported by the Miami Herald, he said the situation in Miami-Dade and Broward Counties were quite unique in Florida. In Miami-Dade, where Citizens has about 173,000 policies, the company makes enough to cover expected expenses.
Additionally, DeSantis said, South Florida hadn't been hit directly by hurricanes in years. "It's justifiable to say that those rates should go down," he said.
Michael Yaworsky, Florida's insurance commissioner who spoke at the news conference after the governor, said that the rate cuts were "the latest sign in a long list of signs of market stability that is emerging throughout our state."
What People Are Saying
On Wednesday, DeSantis said: "Today I announced that Citizens Property Insurance will be instituting homeowners' insurance premium decreases for three-quarters of Miami Dade, and statewide decreases averaging 5.6 percent."
He added: "For the last four years, inflation spurred by the Biden administration, active hurricane seasons, and unchecked litigation in Florida made for an environment that caused turbulence in insurance markets and steep increases in premiums.
"There are a lot of factors involved in insurance rates, and Florida's property and auto markets are challenging—but in addition to the decreases I announced, data suggests that in 2024, Florida had the lowest average homeowners' premium increases in the nation, and the overall market has stabilized with 11 new companies having entered the market over the past two years."
What's Next
The announced cuts to Citizens' premiums in Miami-Dade and Broward Counties might complicate the insurer's efforts to transfer many of its policies to private companies.
Under Citizens' rules, a policyholder is required to accept a transfer to a private insurer only if the offer is within 20 percent of the estimated Citizens renewal premium based on the current approved rates. That means that the cheaper Citizens' premiums are, the more difficult it is going to be for a private insurer to offer a better policy.
"We're way too competitive there," Cerio said of the two counties on Tuesday, as reported by several local newspapers. "We're too cheap."
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