After years of asking for rate increases to help drive consumers to the private market and reduce its exposure, Florida’s Citizens Property Insurance Corp. is now asking for a rare decrease in homeowners’ rates.
The corporation’s Board of Governors on Wednesday voted to file for an average rate cut of 2.6% for personal lines, starting in June 2026. The Florida Office of Insurance Regulation must review the filing and may even land on a larger decrease as insurers litigation costs continue to drop, Citizens’ President Tim Cerio told the board.
“As the market continues to get better, OIR may grant even greater relief,” Cerio said.
Regulators’ decision on the rate cut could come early next year.
The decrease is a stunning reversal of the trend seen in recent years. In early 2022, Citizens’ indicated rate increase was more than 91% for HO policies. And just six months ago, the Citizens board voted to request a 15% average rate increase, the maximum allowed by the statutory glidepath, for personal lines for the first half of 2026.
Wednesday’s board action is the latest indicator that Florida’s December 2022 legislative changes, which ended the industry-despised one-way attorney fees and assignment-of-benefit agreements, are having a marked effect on the previously distressed Florida market. Citizens will end 2025 with its lowest policy count ever—about 385,000 policies—as new carriers have moved into the rejuvenated state arena. Citizens is rapidly becoming the backstop insurer of last resort that lawmakers envisioned when they created the corporation in 2002.
Not every policyholder will enjoy a drop in premiums. But almost half of Citizens’ personal-lines consumers will see an average rate decrease of about 11.5%, staff members told the board. That’s an average annual premium savings of about $359.
It’s possible that a Citizens rate cut will make it slightly more difficult for primary-market carriers to continue to reduce their own premiums enough to make successful take-out offers to Citizens’ policyholders. But officials at the board meeting doubted that will be the case. The Citizens rate news came one week after Florida regulators approved a 3.3% average rate decrease for Heritage Property & Casualty Insurance policyholders in Florida, according to news reports.
Heritage is one of multiple Florida carriers to file for rate decreases this year. Patriot Select, risen from the remnants of Anchor Insurance, said this month that it had reduced average premiums by about 11.3%. Security First, one of the larger Florida carriers, in October filed for an 8% average statewide rate decrease for thousands of homeowners policies.
(Incidentally, Heritage also recently announced it would discontinue its 2021-launched “voluntary wind-only homeowners program,” under which no policies had been written, according to its recent OIR filing.)
For Citizens’ policyholders, all the projections revealed at the board meeting Wednesday were not ideal. Citizens will be asking for a 10.4% average increase for commercial lines for late 2026. But that’s less than the actuarily indicated rate hike. And staff members said the private market appears to be stepping up its take-out offers of Citizens’ commercial policies. The corporation recently saw 1,605 commercial policies removed, and another 600 are on the way out, said Jeremy Pope, chief administrative officer for Citizens. He noted that about 97% of recent take-out offers are close enough to Citizens’ premiums that, by law, the policyholders are no longer eligible to remain with the state-created insurer.
And with policy counts and exposure dropping rapidly, Citizens is now in a position to play hardball with reinsurers. While reinsurance rates have moderated for most Florida property insurers in recent months, Citizens, with its strong reserve levels and U.S. interest rates expected to fall, should demand even lower re prices, said Board Chairman Carlos Beruff.
“I’ve said it before, I have no problem going naked,” Beruff said. “So, we don’t have reinsurance: Who cares? That’s the leverage we have now.”
Board member Charlie Lydecker urged caution, noting that Florida will still be prone to hurricanes in coming years.
Top photo: Citizens’ Board of Governors meeting in Orlando this week. (Florida Channel)
Topics Trends Florida Pricing Trends
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