ORLANDO, Fla. — Citizens Property Insurance is on track to hit 1.7 million policies by the end of the year. It’s more than triple the number of policies it managed just three years ago.
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Many of those impacted by Farmers’ decision to pull out of Florida will likely have to sign on with Citizens.
From policyholders and taxpayers to politicians and insurance agents, many have voiced their concerns about the rapid growth of Citizens.
Before the announcement from Farmers, Citizens reported it had 1.3 million policies. That’s nearly 100 thousand more than what IT had in June 2022 and nearly double than in June 2021. In addition, AA has announced it will not renew policies for some Floridians.
READ: Insurance company pulls out of Florida; 100K policyholders affected
The growth raises the question of if Citizens is prepared for what’s to come.
“Citizens was designed and created actually as the state’s insurer of last resort. So what the market is, is healthy, our numbers go down. And when the market is facing challenges, like we’re seeing right now, our numbers go up. That’s why we were created,” said Michael Peltier with Citizens.
Last month, Citizens reported it had a total of 1.3 million policies, the most ever at an end-of-month count in the last 10 years. It’s expected to grow by 400,000 additional policies by the end of the year.
READ: AAA announces it will drop insurance policies for some Floridians
Insurance expert Tom Cotton says Citizens has been well structured and managed financially. “But this growth is going to stretch that capacity. The other area where they’re going to be stretched is staffing and processing, the huge influx of policies that could be coming their way,” Cotton said.
As for Citizens, the concern with growth is not about finances but the overall financial exposure and where the money will come from to ensure policyholders’ claims will be paid.
“The concern that we have is as we get larger as we get bigger, and our policy count swells, our exposure swells. And the risk that we’ll have to either levy assessments on Florida, consumers or our own policyholders increases as our policy count decreases,” Peltier said.
READ: Insurance company pulls out of Florida; 100K policyholders affected
The other issue is Citizens taking in more policies than it’s losing. Some good news in this is that the Florida Office of Insurance Regulation is seeing more participation in its Citizen Depopulation program.
Essentially, more private insurers will be able to take on more policies from Citizens.
Based on numbers released last week, the office has approved 91,000 policies to be taken out of Citizens this year.
READ: Farmers insurance holders: What you can do next
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