Wave of Florida Homeowners Forced to Use State-Run Citizens Insurance

Homeowners in the “free” state of Florida are signing up for Citizens Property Insurance in record numbers as the property insurance industry is in free fall just as hurricane season begins.

Canceled policies from suddenly insolvent companies cutting homeowners loose is forcing tens of thousands of homeowners to scramble to find coverage.

  • Since 2017 there have been six companies offering homeowners insurance that have been liquidated.
  • In 2022 three more companies are in the liquidation process.
  • Others are leaving the state voluntarily, choosing to not renew policies, or drastically tighten requirements for renewal.

Insurance Fraud

The biggest issue right now in Florida is home insurance fraud, driven by fraudulent roofing claims. Florida accounts for only 9% of insurance claims in the U.S., but 79% of insurance lawsuits.

In these roofing scams, a roofer finds damage to a home. The homeowner is convinced to sign an assignment of benefits form, giving contractors the right to file an insurance claim on their behalf. A claims adjuster finds the damage usually far less than quoted, and the roofer brings a lawsuit against the insurance company demanding the payout of the quote. The insurance company can pay to fight in court or settle the claim, in either case it’s a loss.

To make matters worse, Florida is already a high risk state from tropical storms and hurricanes.

DeSantis’s office reports that, for two consecutive years, net underwriting losses have exceeded $1 billion each year.

In May DeSantis and the Florida legislature passed “the most significant reforms to Florida’s homeowners insurance market in a generation,” when a special session approved measures in three days — with little public input or expert analysis.

Democrats criticized the plan, saying it does not do enough to grant immediate financial relief to homeowners whose premiums have increased. Republicans acknowledged it would take 12 to 18 months before prices may drop.

The loss of private insurers has driven property owners to Citizens Property Insurance, a state-run public insurer meant to be a last resort.

AP, WPTV, Bankrate