As human-caused pollution drives up the planet’s temperature, the destabilized weather causes disasters that devastate communities worldwide. Florida, already prone to hurricanes, is one area suffering from supercharged storms, and insurers have pulled out in response to the elevated risk. Now, another form of self-serving behavior on the part of insurance companies could drive up costs for residents across the state, Spectrum News reported.
What’s happening?
The state of Florida offers Citizens Insurance, a last resort for homeowners who are priced out of or refused by commercial insurance companies. It functions like an insurance company but is funded by mandatory contributions from other insurers and overseen by the state. If its funding is overdrawn, it can assess additional fees, which everyone in the state has to pay.
Recently, Citizens Insurance has been shifting its policies back to private insurers. While 55,000 new policies have been signed in 2025, 125,000 have been depopulated, and almost half a million have been transferred to private companies since the beginning of 2024.
That may sound like a good thing, as once-desperate homeowners are able to reenter the mainstream market, but insurers aren’t accepting just any policies.
“Some insurance companies will come in and say, you know, we’re looking for homes that are under five years old,” Citizens Insurance spokesperson Michael Peltier said, per Spectrum News. “We are looking for roofs that are under 10 years old. Each company is going to have its own criteria.”
In other words, insurance companies are picking out the Citizens Insurance policies that are least risky to insure — while dropping long-standing customers left and right after deeming the risk too high.
Why is this cherry-picking approach significant?
This pattern is a problem because it will raise costs for consumers, who are already suffering from a meteoric rise in insurance costs.
“Over the last five years, I remember looking at the average premium for homeowners in my book of business and it was under $1,000,” said Steve Gensolin, who owns Little Star Insurance and has sold insurance in Florida for decades, per Spectrum News. “Now it’s probably over $4,000.”
As private insurance companies take on only the lowest-risk accounts, they take in profit and leave the high-risk accounts to Citizens Insurance. When that high risk leads the organization to go over budget, assessments against the whole state make up the difference, meaning Floridians foot the bill.
“If we take all the good stuff out of there, and re-inject it with bad stuff, the citizens of Florida will be holding an absolute ticking time bomb of financial liability,” Gensolin said.
District 42 State Rep. Anna Eskamani noted: “It’s discriminatory to some degree. It continuously creates the opposite of a free market to some degree, where companies can pick and choose who they want to cover and drop folks without any notice while of course Citizens is carrying the brunt of potential high risk and expensive policies.”
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What’s being done about insurance companies acting selfishly?
So far, legislation has not kept pace with the situation, but new laws could address it.
“I think there could be some legislative tweaks or fixes that could allow OIR (Office of Insurance Regulation) to look at this a little bit more closely,” former state Rep. Scott Plakon said, per Spectrum News. “And if they do sense companies that are cherry picking to look at how they segment their markets to bring more fair rates.”
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Insurance agency accused of creating ‘ticking time bomb’ for homeowners: ‘Opposite of a free market’ first appeared on The Cool Down.
