Florida’s state-backed property insurance company Citizens is about half the size it was a few years ago, and a spokesman says there’s not much more weight the company can shed.
In the past few years, Citizens has steered more than half its policies to the private market in a process called depopulation. That’s left the company with about 490-thousand policies still in effect. Spokesman Mike Peltier says the properties that remain are the ones hardest to insure.
“We’ve pretty much come to the point where this may be the residual market in Florida. What we’ve got left in our portfolio are older homes, those with loss history…those are the policies citizens was created to cover.”
After the 2004-2005 hurricane season, many insurance companies left the state, leaving people with no choice but to go with citizens. The company’s board recently approved a purchase of about $2.5 billion of reinsurance—that’s insurance for the insurers.
The money lowers the risk of assessment on all Florida policyholders in case of event of a catastrophic storm or series of events. The hurricane season starts June 1.
