After the latest hurricanes in Florida, homeowners are wondering where they'll turn for coverage if their insurer of last resort is no longer an option. Citizens Property Insurance Corp. is Florida's largest provider of home insurance, having 1.3 million policies on the books as of September. It's a state-backed nonprofit established to serve people who can't obtain policies with private insurers. Given the destruction in the past few weeks, Citizens is looking at paying billions in claims, CNN reports, bringing fears about its solvency. Citizens already had moved to send 300,000 of its policyholders to private insurers.
"I'm scared about what's going to happen… if we're going to be paying more money than what we pay with Citizens," Nancy Morales told CBS News. Republican Gov. Ron DeSantis had warned earlier in the year that Citizens was "not solvent," saying it can't function with "millions of people on that because if a storm hits, it's going to cause problems for the state." This week's Hurricane Milton didn't cause as much damage as feared. "But that doesn't change the fact that Citizens is potentially one catastrophic storm or storm season away from insolvency," Democratic Sen. Sheldon Whitehouse, whose leading an investigation into Citizens' viability, told CNN.
If the insurer is hit with claims it can't pay, "Citizens has a mechanism to pass its losses on to Florida families, who are already paying sky-high premiums," said Whitehouse, who's concerned the insurer will turn to the federal government for a bailout. Florida regulations permit Citizens to make up its shortfall from policyholders and other consumers, a trade group spokesman said; Whitehouse said that's unlikely to be a feasible solution. Citizens and DeSantis' office said more private insurers are moving into Florida, though the effect of the recent storms on that isn't clear. A Moody's analyst cautioned that Citizens, which is limited in how much it can raise premiums, might cancel policies after the recent hurricanes. That could lead Floridians who've left Citizens to try to return. (More Florida stories.)
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