Citizens Property Insurance Depopulation: What Florida Homeowners Should Know

If you are a Florida homeowner who has been insured by Citizens Property Insurance Corporation, you may have recently received notice that your policy is being transferred to a private insurance company. This process, known as Citizens Insurance depopulation in Florida, has accelerated dramatically in 2025, leaving many homeowners uncertain about their coverage and their rights.

Understanding what depopulation means, why it is happening, and how it affects your insurance coverage is essential for protecting your home and your financial security.

What Is Citizens Property Insurance?

Citizens Property Insurance Corporation was created by the Florida Legislature in 2002 as an insurer of last resort. It was designed to provide property insurance coverage to Florida homeowners who could not find coverage in the private market due to high risk factors such as coastal location, older roofs, or other underwriting concerns.

Citizens is not a traditional insurance company. It is a state-run, not-for-profit entity backed by the financial resources of the State of Florida. Because of this structure, Citizens policies have historically offered lower premiums than comparable private market coverage, making it an attractive option for many Florida homeowners.

Why Is Depopulation Happening Now?

At its peak in October 2023, Citizens held approximately 1.4 million policies, making it the largest property insurer in Florida. This level of exposure created significant financial risk for the state. If a major hurricane had caused catastrophic losses, Citizens might not have had sufficient reserves to pay all claims, potentially triggering assessments on all Florida policyholders regardless of their insurer.

To reduce this risk, Florida lawmakers and regulators have aggressively promoted the depopulation program, which allows private insurers to assume blocks of Citizens policies. Legislative reforms passed in 2022 and 2023, including the elimination of one-way attorney fees and the ban on assignment of benefits, have made the Florida market more attractive to private carriers.

By the end of 2025, Citizens expects to have fewer than 400,000 policies, the lowest level in over 20 years. More than 546,000 policies were transferred to private insurers through the depopulation program in 2025 alone. Seventeen new insurance companies have entered the Florida market since the reforms were enacted.

How Does Depopulation Affect You?

Under Florida law, you cannot remain with Citizens if a private market insurer offers you a policy at a premium that is within 20 percent of your current Citizens premium. This is known as the takeout rule. If you receive a takeout offer that meets this threshold, you are automatically ineligible for Citizens coverage.

When your policy is taken out, your coverage transfers to the new private insurer. The terms of your coverage should remain substantially the same during the transition, and the new insurer cannot immediately raise your premium beyond the 20 percent threshold until your policy comes up for renewal.

However, many homeowners have reported confusion about their new coverage, concerns about the financial stability of their new insurer, and frustration with claim handling differences between Citizens and private carriers.

Your Rights During the Takeout Process

If you receive a takeout notice, you have important rights that you should understand:

1. Review the offer carefully. Compare the coverage limits, deductibles, and exclusions of the new policy to your current Citizens policy. Look for any material differences that could affect your protection.
2. Verify the insurer’s financial rating. Private insurers participating in the depopulation program must be approved by the Florida Office of Insurance Regulation, but not all carriers are equally stable. Check the company’s AM Best rating and claims history.
3. Understand the premium calculation. Confirm that the offered premium is actually within 20 percent of your Citizens premium. If it exceeds this threshold, you may be eligible to remain with Citizens.
4. Document your current coverage. Keep copies of your Citizens policy declarations page, coverage forms, and any endorsements. This documentation will be important if disputes arise after the transfer.

What to Do If You Have a Claim Dispute After Takeout

Some homeowners who have been transferred to private insurers through depopulation have encountered difficulties when filing claims. Common issues include delays in claim processing, disputes over coverage, and lower settlement offers than expected.

If you experience problems with your new insurer, take these steps:

1. Document everything. Keep records of all communications with your insurer, including emails, letters, and notes from phone calls. Photograph all damage thoroughly before any repairs begin.
2. Request a written explanation. If your claim is denied or underpaid, ask for the specific policy language and reasons supporting the decision.
3. Consider hiring a public adjuster. An independent adjuster can provide a second opinion on the value of your claim and help you negotiate with the insurance company.
4. Consult with a property damage attorney. If your insurer is acting in bad faith or refusing to honor your policy, legal action may be necessary to protect your rights.

Can You Return to Citizens?

In some cases, policyholders who have been taken out of Citizens may be eligible to return. If no private market insurer can offer you a renewal policy at a premium within 20 percent of what Citizens would charge, you may be able to return to the state-backed insurer.

Recent reports indicate that Citizens is considering rate decreases for 2026, which could make it harder for private insurers to offer competitive takeout rates. If your private insurer cannot match the new Citizens rates at renewal, you may have the option to move back.

Contact Krapf Legal for Help

Navigating the Florida property insurance market has never been more complicated. Whether you are dealing with a takeout from Citizens, a claim dispute with your new insurer, or concerns about your coverage, the experienced attorneys at Krapf Legal can help.

We have helped countless Florida homeowners fight for fair treatment from insurance companies and recover the compensation they deserve. Contact us today for a free consultation to discuss your situation.