The number of Citizens policies recently passed 1 million for the first time since early 2014 and could reach nearly 2 million by the end of 2023, according to a Citizens projection. Two years ago, Citizens insured just over 510,000 Florida properties.Look at that last sentence and ask yourself whether Barry Gilway would repeat it today while staring at the $100+ billion damage left in the aftermath of Ian compared to his $13.6 billion reserves.
Floridians now have the highest property-insurance rates in the nation, according to the industry-funded Insurance Information Institute. The average premium is $4,231 - nearly triple the U.S. average of $1,544. "It's reached a point where Floridians cannot find affordable coverage for their homes," Institute spokesperson Mark Friedlander said.
At the same time, from October through June, nearly 160,000 Floridians dropped the flood insurance policies they bought from the Federal Emergency Management Agency as it raised rates on some homeowners. Flood insurance is separate from homeowners' coverage.
The instability in the homeowners' market is the result of a unique mix of circumstances including costly litigation against insurers and the exposure of Florida insurance companies to storm damage in nearby states. Many Florida-based insurers expanded to cover properties in Louisiana, which has faced tens of billions in losses from Hurricane Laura in 2020 and Hurricane Ida in 2021. Insurers were hammered.
While the number of Citizens-insured properties has doubled since September 2020, the value of the insured properties has nearly tripled to $360 billion from $133 billion, Citizens records show. The growth has been concentrated in hurricane-prone southeastern Florida, which has some of the state's highest property values.
"One major hurricane event or a series of hurricane events like Louisiana had in the past few years could easily wipe out Citizens' reserves to pay claims," Friedlander said. Barry Gilway, the Citizens CEO, said at a July meeting that Citizens has $13.6 billion in reserves to pay insurance claims.
"Citizens is in a phenomenal financial position, and we're prepared for whatever comes," Gilway said.
I'll leave it to you Florida citizens to educate us on your takes about the above information. But it appears that Citizens is about to exhaust all their reserves if these damage estimates prove correct.