Expert FAQ: How Will Depopulating Citizens Insurance Affect Florida?

After years of historic storms – and historic clean-up costs – flood insurance has become a part of the national conversation.  Florida residents are no exception.  Recent estimates indicate that Citizens Property Insurance Corporation – Florida’s state-run property insurance company, which offers subsidized rates to members – falls at least $1.5 billion short of its liability in the event of another destructive hurricane season.

According to Bob Sanchez, policy director of the James Madison Institute, “In the event of a big storm or series of storms, every Floridian who pays for property or car insurance could be on the hook.”

Most policymakers agree that Citizens can’t continue as is, and during the past few years, Florida’s legislature has moved to depopulate the insurer. This reduces Citizens’ – and the state’s – liability, but threatens financially strapped homeowners, who no longer get a break on rates. It also has the potential to discourage the coastal development that draws tourism.

As Citizens continues to drop policies, is Florida growing financially stronger, or is it undermining the things that make it successful?

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