Home Insurance Costs Drop, but Experts Warn Rebound Possible

Home insurance rates in Florida have declined, but industry experts caution that the reprieve may be temporary as the state moves to shift more policies out of the state-run insurer, Citizens Property Insurance.

A bill recently passed by the Florida House of Representatives, with a decisive 88–19 vote on Monday, now awaits the approval of Governor Ron DeSantis. The legislation directs Citizens to establish two clearinghouses for commercial residential and non-residential policies by 1 January 2027.

One clearinghouse will allow authorised insurers to make takeout offers for commercial and non-residential policies, while the second will open the market to approved surplus lines insurers—companies not licensed in Florida but permitted to operate as “eligible” insurers.

Miami Representative Mike Redondo, who sponsored the bill, emphasised that reducing Citizens’ policy load would strengthen the state’s insurance market and provide more options for business and commercial property owners. “If a policyholder receives an offer from the surplus lines clearinghouse, they are not obliged to accept it,” he said. “They can still shop the market through an agent, whether in the admitted or surplus lines market.”

Some lawmakers voiced caution. Representative Allison Tant warned against pushing customers out of Citizens without stronger oversight of surplus lines carriers, while Representative Jose Alvarez argued that the move would return Citizens to its role as “insurer of last resort” and stimulate healthy competition in the private sector, potentially lowering premiums.

Insurance Commissioner Mike Yaworsky has raised concerns about transparency, noting that surplus lines insurers do not have to disclose premiums or coverage terms until the day before policy renewal—posing potential challenges for policyholders.

Citizens has used the clearinghouse process for over a decade, reducing its policy count from 1.41 million in October 2023 to 336,000 last week. Under the new rules, offers from private firms for residential single-family policies must be within 15% of Citizens’ premium, while commercial offers must match or improve upon Citizens’ terms. Surplus lines insurers must meet stringent financial standards, including a minimum five years of audited statements, an A-minus financial rating, and an A-VII A.M. Best rating.

Last week, the Citizens Board of Governors proposed new 2026 rates, cutting premiums for the most common homeowners’ multi-peril policy by an average of 8.8%, while wind-only policies dropped by 5.5%.

While these reductions offer relief to homeowners, experts warn that shifting policies to surplus lines and private insurers may eventually drive rates higher, underscoring the ongoing volatility of Florida’s insurance market.