Citizens Insurance plans to cut premiums next year. Will that lead to fewer takeouts?

Now that state-owned Citizens Property and Casualty Insurance Corp. is seeking to reduce premiums in South Florida and other parts of the state, customers of private market insurers are likely wondering if their policies will get cheaper as well next year.

The answer is a resounding maybe.

Several private market insurers have already announced significant rate decreases that could drive down renewal premiums for their customers.

Others are likely to follow, driven by the same market factors behind the Citizens reductions: fewer lawsuits since tort reforms were enacted in 2022 and 2023, and decreases in the cost of reinsurance that Florida insurers must buy to ensure they can pay all claims after a catastrophe.

But will insurers who participate in efforts to reduce Citizens’ policy count — by “taking” policies out of Citizens — reduce their premiums to stay within 20% of Citizens’ estimated renewal cost?

If they don’t — or can’t if reductions aren’t supported by their next rate filing — then those takeout customers will be allowed to remain with Citizens, and some who have already been depopulated will be entitled to return.

That would be good news for Citizens policyholders who would prefer to remain with the state’s “insurer of last resort,” but potentially bad news for Citizens if it plans to further downsize below the 385,000 policies projected at the end of 2025.

After a decade of increasing costs, Citizens recently recommended reducing rates by 2.6% statewide, while South Florida policyholders are expected to see average rate reductions of at least 11% for coverage of single-family homes and at least 6.8% for multiperil condo unit coverage.

Citizens’ reductions, a result of cost savings from reforms enacted by the Legislature and governor in 2022 and 2023, would reduce premiums for new and renewing policies in many parts of the state by hundreds of dollars beginning on July 1, if state insurance regulators approve.

Yet, the reductions could leave the company again vulnerable to the kind of growth it has worked so hard to reverse. State law prohibits policyholders from staying with Citizens if any takeout company is willing to renew their policy for a premium that’s less than 20% higher than Citizens’ estimated renewal premium.

And policyholders already taken out could come back to Citizens if no private market company can renew them for less than 20% more than Citizens’ renewal premium.

Twelve private-market insurers participated in Citizens’ depopulation program between January and October 2025. Together, they took out 416,233 policies and all but 14,732 fell below the 20% threshold, meaning 96.5% were barred by state law from remaining with Citizens, according to data presented to the company’s Board of Governors.

The South Florida Sun Sentinel asked Citizens spokesman Michael Peltier if the company was concerned that reducing its premiums would increase the number of policyholders eligible to remain with the company.

Peltier said “no” and acknowledged that some companies might reduce their premiums to prevent rejections of their takeout offers.

“The market is so dynamic now, it is hard to predict what will happen,” Peltier said. “Companies participating in the takeout program will be aware of Citizens’ approved rates, and it is not unrealistic to expect their renewal offers will take into account those changes.”

Cost reductions must pass review

Yet, while insurers can remain competitive by rushing planned cost reductions into the marketplace, they cannot reduce their policy costs solely to remain in lockstep with Citizens, say officials of two private-market insurers that over the past three years relied on Citizens’ depopulation program to help build their policy counts.

John Rollins, CEO of Patriot Select Property & Casualty Insurance Company, says he expects Citizens’ premium reductions will make fewer policies attractive to depopulation participants if those companies cannot justify lower premiums in rate filings to the Office of Insurance Regulation.

Rollins, former chief risk officer at Citizens, said that while companies cannot base their decisions to offer lower-cost premiums on a need to compete with Citizens, they can, if they perceive a need to be competitive, reduce their premiums sooner and file plans justifying those lower premiums later, he said.

In November, Rollins told the Sun Sentinel that Patriot Select was able to justify matching Citizens’ renewal premiums for 12,747 takeout customers after being priced at 15% above Citizens in June. The lower cost premiums, he said, were priced at Patriot’s approved rates.

Rollins said he expects private market insurers will offer lower-cost premiums next year, but that would be the result of expected reductions in reinsurance costs.

Some insurers can’t cut prices

Kerrie Ruland, senior vice president of Monarch National Insurance, concurs with Rollins that cost reductions must be supported by loss-trend data and approved by state insurance regulators.

She adds that consumers shouldn’t expect all insurers to reduce their premium costs next year.

“With carriers seeing a post-reform trend of decreasing loss costs, it’s natural to consider rate decreases,” she told the Sun Sentinel. “Some, however, either aren’t seeing the costs come down as quickly, or they are cautious about decreasing premium (costs) with only two years of reform on the books.”

Premium costs for Monarch’s 100,427 customers decreased by 2.8% between January and September, according to a Sun Sentinel analysis of data released by the Office of Insurance Regulation.

Ruland said she doesn’t expect Citizens’ cost reductions to have much effect on the company’s depopulation efforts.

“Many consumers have voluntarily accepted rates over the 20% threshold because they want to be insured with a private carrier,” she said. “Many carriers are loosening guidelines or opening capacity where it was previously closed and consumers are benefiting from it.”

Questions about the impacts of reduced rates on Citizens’ depopulation efforts assumes that private-market insurers will still want to depopulate Citizens’ policies.

Due to both the depopulation efforts and increased appetites for business by private market carriers, Citizens’ policy count has fallen dramatically since peaking at 1.4 million policies in September 2023.

The company projects finishing the year with 385,000 policies — its lowest ever count since it was created in 2002 by the merger of two insurers of last resort, the Florida Residential Property and Casualty Joint Underwriting Association and the Florida Windstorm Underwriting Association.

The company’s board of governors cheered the return of its status as the insurer of last resort, created by the state to cover properties deemed too risky for private market companies to affordably cover.

Citizens customers with policies renewing after July 1 who have already received takeout notices based on current rates will not receive revised notices if lower renewal costs are approved before the renewal date, Peltier said.

By then, “the policy has been transferred to the takeout company and they are no longer a Citizens customer,” he said.

To find out whether Citizens’ premium cost reduction would qualify them to return to Citizens, Peltier says policyholders will have to contact their agent.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at [email protected].

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