Florida Scales Down Rate Hikes for Citizens Insurance Customers

Florida regulators have officially approved new insurance rates for Citizens Property Insurance Corporation, resulting in an average statewide premium increase of 6.6% for the most common type of homeowners policy. This decision comes after the Florida Office of Insurance Regulation made adjustments to the initial rate hike proposals that Citizens submitted last year, ultimately reducing the scale of the increases.

In a related announcement, Governor Ron DeSantis stated on Wednesday that many Citizens policyholders in Miami-Dade and Broward counties will actually see a reduction in their premiums. This marks a significant shift, as Citizens has grown to become the largest insurer in Florida due to challenges in the private insurance market. The approved rate changes reflect ongoing efforts to balance affordability for homeowners while maintaining financial stability within the state-backed insurer.

A 17-page order published on Thursday on the Florida Office of Insurance Regulation’s website outlined the newly approved rate adjustments for Citizens Property Insurance Corporation. However, the order did not provide specific details on how these rate changes will vary by county. What is clear is that, overall, average premiums for policyholders will rise, with the new rates set to take effect on June 1.

Citizens offers a range of insurance policies, but the most commonly purchased coverage is homeowners multi-peril insurance, which provides broad protection against various risks. Last year, Citizens initially proposed a statewide average rate increase of 13.5% for this type of coverage. However, after reviewing the proposal, the Office of Insurance Regulation approved a more moderate increase of 6.6%, aiming to strike a balance between affordability for policyholders and the financial sustainability of the state-backed insurer.

The newly approved rate adjustments will impact a variety of “personal residential” insurance policies offered by Citizens Property Insurance Corporation. These policies cover not only standard homeowners insurance but also protection for mobile homes and condominium units.

For primary residences—homes where policyholders live as their main place of residence—insurance rates will rise by an average of 8%. However, non-primary residences, such as vacation homes or rental properties, will see a significantly higher average increase of 17%.

When combining rate adjustments for both primary and non-primary residences, the overall statewide average increase will be 8.6%, as stated in the regulatory order. These changes reflect ongoing efforts to stabilize Florida’s insurance market while addressing financial challenges faced by Citizens, which has grown into the state’s largest insurer due to issues in the private market.

Citizens Property Insurance Corporation was originally established as a last-resort option for Florida homeowners who were unable to secure coverage through private insurance companies. However, in recent years, it has grown significantly and become the largest insurance provider in the state. This expansion is largely attributed to ongoing challenges in the private insurance market, including rising costs, financial instability, and insurers reducing or discontinuing coverage in high-risk areas. As a result, more homeowners have turned to Citizens for reliable coverage. As of last week, the state-backed insurer was responsible for 941,158 active policies, highlighting its crucial role in Florida’s insurance landscape.

State law places limits on how much Citizens Property Insurance Corporation can increase premiums for its policyholders each year. For 2025, the law allows for a maximum rate hike of 14% for owner-occupied primary residences. However, for non-primary residences—such as vacation homes or rental properties—rate increases could be as high as 50%.

Citizens officials have long argued that the state-backed insurer needs to raise its rates because, in many cases, it charges less than private insurance companies. This pricing gap has made Citizens an attractive option for homeowners, even as Florida has actively worked to transfer policies from Citizens back into the private market. Officials warn that keeping Citizens rates artificially low discourages policyholders from seeking coverage through private insurers, ultimately increasing the financial burden on the state-backed company.

Supporters of shifting policies away from Citizens emphasize the financial risks involved, particularly if Florida experiences a major hurricane or multiple storms in a single season. Since Citizens is a state-run entity, a catastrophic event could leave Florida taxpayers on the hook for significant losses. However, many homeowners, particularly in high-risk areas, argue that they have few viable alternatives for coverage, as private insurers have either exited the market or raised premiums to unaffordable levels. The state’s insurance crisis has also become a contentious political issue, as rising costs place increasing pressure on residents.

Tim Cerio, president and CEO of Citizens, recently addressed the House Insurance & Banking Subcommittee, acknowledging that Citizens’ rates are generally below market levels due to longstanding state regulations that limit annual increases. Unlike private insurers, which must charge actuarially sound rates based on risk and financial sustainability, Citizens has been constrained by state law.

“Insurance companies must charge an actuarially sound rate. We’re not doing that,” Cerio explained. “We’re below that. So our customers—not everybody, but most of them around the state—are getting, it’s fair to say, subsidized insurance not based on any economic need.”

A regulatory order released on Thursday emphasized the need for Citizens to charge rates that are both actuarially sound and “non-competitive” to ensure it does not undercut private insurers. However, the order also recognized that in some areas, rate decreases are warranted.

The review conducted by the Florida Office of Insurance Regulation (OIR) found that for several policy types, certain regions in the state actually justified rate reductions based on actuarial data. However, if these reductions were fully implemented while ensuring non-competitiveness, most policyholders in those areas would still see an increase capped at 14%.

To address this issue, regulators decided to allow rate decreases of up to 10% in select territories. This approach is intended to provide lower premiums to some policyholders while still complying with statutory requirements to maintain financially responsible and non-competitive rates.

During a public appearance in Miami on Wednesday, Governor Ron DeSantis announced that a significant portion of Citizens policyholders in South Florida would benefit from premium reductions. Specifically, he stated that 73% of Citizens customers with homeowners policies in Miami-Dade County would see their premiums decrease, with an average reduction of 6.3%. Additionally, 52% of Citizens homeowners policyholders in Broward County would also receive premium reductions, with an average decrease of 4.5%.

These changes reflect Florida’s ongoing efforts to stabilize its troubled insurance market, balancing the need for financial sustainability in Citizens Insurance with the goal of keeping coverage affordable for homeowners.