Enrollment at Florida’s insurer of last resort now sits near historic lows, even as the state adds residents and housing stock, according to Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents.
He points to a sharp contraction at Citizens Property Insurance Corp., where policies in force fell from 1,407,805 in September 2023 to 427,097 in November.
Ulrich and other market observers tie the shift directly to legislative reforms passed in 2022. Those measures targeted litigation costs and claims practices that had pushed private carriers out of the market and driven policyholders into Citizens.
Joshua Stephens, Southeast regional vice president at the National Association of Mutual Insurance Cos., says states struggling with expanding FAIR plans should pay attention.
He argues that insurance affordability starts with reducing risk costs, whether through litigation reform, regulatory changes, or loss prevention. According to Stephens, the decline at Citizens signals a market that has regained balance and competition.
Stephens credits Florida lawmakers with focusing on cost drivers rather than trying to cap prices. He says the state once accounted for close to 80% of US insurance-related litigation, a concentration that distorted pricing and availability.
Reforms that curtailed abusive practices shifted the environment for both insurers and consumers.
Citizens itself is reflecting that change. This month, its board joined private domestic carriers in seeking lower property rates, approving a statewide average reduction of 2.6% for personal lines.
It marked the first rate-decrease recommendation at Citizens since 2015, citing the effects of the reforms.
Ulrich calls the turnaround striking given the short timeframe. He says it points to stronger property market health and deeper voluntary market capacity, noting that regulators have approved 17 property insurers during the same period.
Florida’s population continues to grow, putting more property in hurricane-prone areas. Even so, Stephens says competition has increased enough to ease pressure on rates.
Citizens enrollment dropped below 500,000 in early 2016 and stayed there until September 2020, a level the market has now approached again.
Ulrich says his team cannot recall enrollment ever falling below 400,000. The surge earlier in the decade followed a wave of nonrenewals, tighter underwriting, and multiple carrier insolvencies. By August 2022, Citizens topped 1 mn policies and remained above that mark until November 2024.
Carriers at the time pointed to abusive claims litigation, including one-way attorney fee rules and assignment of benefits claims that transferred policyholder rights. Those practices amplified losses and uncertainty.
The last comparable enrollment level came in 2019, when Florida’s population stood at about 21.47 mn, nearly 1.9 mn fewer residents than last year, according to Census data.
Fred Karlinsky, a shareholder at Greenberg Traurig, says Citizens enrollment should be higher to reflect that growth. Instead, it remains low.
Florida also avoided Atlantic hurricane landfalls this year. Ulrich says that absence may influence future rates, though not necessarily Citizens enrollment. He attributes the current shift primarily to legislative action.
Karlinsky says Florida understands hurricane risk. The larger problem over the past decade stemmed from litigation and fabricated claims.
Since the reforms, he sees a sharp change in availability, with many carriers now willing to write business they previously avoided. Without that predictability, he says, insolvencies would have continued.
Maintaining the reforms matters, Karlinsky adds. Strong legislation shows how quickly a property market can recover.
Chas Mitchell, assistant vice president of state government relations at the American Property Casualty Insurance Association, says new insurers have helped depopulate Citizens since Florida enacted broad legal system abuse reforms.
That, he says, lowers taxpayer exposure and gives homeowners more coverage options at more competitive rates.
