Editorial: Citizens insurance too big for its britches

OUR POSITION: Florida's home insurance market will not stabilize until Citizens can quit taking on new customers.

Citizens Property Insurance Corp. — Florida's state-backed home insurer of last resort — is poised to cover more than 1.7 million policyholders by the end of 2023.

That is up from 1.1 million last year and 447,000 policyholders in 2019, according to budget documents from the nonprofit insurance group created by the state in 2002.

The public insurance outfit is on track to hit 2 million policies statewide.

Citizens, whose board approved a 14.2% premium hike for 2023, is the state's largest homeowner insurance provider and continues to grow as private insurance firms continue to flee (or avoid) the Florida market and big payouts because of hurricanes.

The problem might only get worse with warmer gulf and ocean waters and rising sea levels creating bigger, slower moving and more intense hurricanes and tropical storms.

That means more property damage, more claims and likely more private insurance carriers fleeing the state after storms and surges of claims.

Florida's population growth and friendly state and local policies that have allowed significant real estate development along our shorelines and on barrier islands adds to the challenges when a big storm hits.

The GOP-controlled Florida Legislature and Gov. Ron DeSantis passed measures this session aimed at curbing lawsuits brought against insurance companies.

The Insurance Information Institute — an insurance industry group — says 79% of all homeownership lawsuits filed nationally happen in Florida.

The aim — according to the insurance industry, DeSantis and his GOP cohorts — is to reduce insurance lawsuits and legal scams and that will help bring private companies back to the marketplace.

But many Floridians are rightfully skeptical of the situation, the insurance industry and lawmakers who seem all too willing to carry their water in Tallahassee.

For many Floridians, insurance companies have broken social contracts — repeatedly.

We have the old-fashioned notion that customers (policyholders) pay insurance premiums and then when a tree falls on their house — or in the case of Hurricane Ian thousands of trees fall and there are biblical winds and storm surges — then that insurance carrier reasonably covers that damage.

That's very old fashion for many insurance firms.

Plenty of the big insurance firms — you know some of the ones with endless commercials during NFL and NBA games — pulled up stakes and left Florida's homeowners insurance market after past storms.

Some of those insurance companies still offer car insurance policies. (You know the ones mandated by state laws across the country — which makes for a pretty good business model.)

Their exit has resulted in some less reputable and less financially resilient insurance firms coming into the Florida market. They tend to last until the next big storm — in this case Hurricane Ian — and then they do what some of their less reputable predecessors have done.

They ignore or lowball customers' claims and then go belly up or sell off their Florida policies to the next company that hits town.

The local aftermath of Hurricane Ian saw many of our neighbors as well as small businesses and nonprofits greeted by a repeat of past storms.

Ignored calls, denied or lowball claims, policy cancellations and high insurance premium increases are still too often the norm.

That leaves Citizens — which was the successor to two similar publicly backed insurers of last resort the state had to create after Hurricane Andrew back in 1992. That storm sent 11 insurance firms into bankruptcy and many others fled the state.

The public backstop continues to be the last resort for many Florida homeowners — many of which are also mandated to have insurance.

We hope the changes approved by the Legislature and DeSantis help the problem and bring more and new honest insurance players into the Florida marketplace.

But, please excuse our skepticism.