What’s the real story on Citizens Property’s Depopulation program?

In the majority of states, the process of securing property insurance has been always been relatively straightforward. Indeed, all that’s really required is a bit of shopping around for a good rate, a few phone calls and, of course, a signature or two.  

Things can be a bit different here in Florida, however, as our state’s record of powerful storms and destructive hurricanes over the last two-plus decades has resulted in everything from property insurance companies raising premiums to astronomical levels, going bankrupt paying claims, refusing to provide coverage and even leaving the state altogether.

While a complete breakdown of our state’s tortuous history in this area is beyond the scope of a single blog post, it’s sufficient to say that it was against this unsettled backdrop that the Florida Legislature created Citizens Property Insurance Corporation back in the summer of 2002.

For those somewhat unfamiliar with Citizens Property, it is a nonprofit government entity created for the sole purpose of providing the necessary property insurance to those owners of homes, condominiums and businesses here in the Sunshine State that are otherwise unable to secure the necessary coverage via the private market.

In general, Citizens Property is funded by the premiums paid by policyholders. State law, however, dictates that in the event a hurricane or other major weather-related event serves to deplete the organization’s surplus, assessments (i.e., premium hikes) will be imposed on policyholders until such time as the coffers are refilled.

Interestingly enough, state law also mandates that Citizens Property must create programs designed to reduce this risk of high assessments by returning policies to the private market. This mandate, in turn, has resulted in the formation of what is known as the Depopulation program, something we’ll examine further in our next post, including legislation recently signed by Governor Rick Scott to improve transparency in this area.

If you have questions or concerns about a denied or delayed property insurance claim, please consider speaking with an experienced legal professional who can help get the answers you need and deserve.