The Risks of Relying on Citizens Property Insurance: What Florida Homeowners Need to Know

At first glance, Citizens Property Insurance might seem like an affordable option for Florida homeowners. With rising premiums across the state, it’s easy to see the appeal of a lower quote. But before you commit, it’s important to understand exactly what Citizens is—and what it isn’t.

Citizens Property Insurance was never intended to be a long-term solution. It was created by the state of Florida as an “insurer of last resort”—a safety net for homeowners who had no other option.

The Risks of Relying on Citizens Property Insurance.

Unfortunately, some agents continue to place clients with Citizens even when better, more comprehensive coverage is available. At Richard Dean Insurance, we believe in educating our clients and guiding them toward the best long-term protection—not just the lowest price.

Let’s explore the hidden risks of Citizens Property Insurance and why private coverage is often the smarter, more stable choice.

What Is Citizens Insurance—and Why Was It Created?

Citizens Property Insurance Corporation was established in 2002 as a public insurer to cover Florida homeowners who couldn’t secure coverage from private companies—often due to high hurricane risk or property location. Over time, as the private market shrank and rates rose, more and more homeowners turned to Citizens.

But here’s the catch: Citizens isn’t built to compete. It doesn’t operate like a private insurance company. Instead, it’s designed to be a temporary option until private market conditions improve. As Florida's insurance landscape evolves—with new carriers entering the market and legislative reforms in place—many homeowners now qualify for better private options.

Yet, Citizens policies are still being written by agencies with limited access to the private market. This leaves many Florida homeowners underprotected—and often unaware of the risks involved.

The Financial Risk: Special Assessments

Unlike private insurers, Citizens doesn’t keep robust financial reserves. If a major hurricane hits and the company can’t pay out all claims, it can issue special assessments to Florida policyholders—including those not insured with Citizens.

Here’s what that could look like:

• Citizens policyholders could face up to 25% in extra charges on their annual premium.

• Even Floridians with private insurance may be assessed up to 10% to help cover Citizens’ shortfall.

That’s potentially hundreds—or even thousands—of dollars in surprise costs, on top of your regular bill. While private companies are required to maintain adequate reserves and follow stricter financial regulations, Citizens shifts that risk onto the policyholder.

Eligibility Restrictions and Policy Transfers

Citizens isn’t available to just anyone. You must first be denied by private carriers, or your private quote must be at least 20% higher than what Citizens offers. And even if you qualify now, there’s no guarantee you’ll be able to stay with Citizens.

Under their depopulation program, Citizens can transfer your policy to a private insurer—even without your consent. That means:

• You could be removed from Citizens and placed with a new carrier at renewal.

• Your premium may change, and your new coverage terms could be significantly different.

• You’ll have limited time to make alternative arrangements.

At Richard Dean Insurance, we believe homeowners should be in control of their insurance decisions—not forced into a last-minute switch.

Coverage Limitations You Need to Know

One of the most important concerns with Citizens Property Insurance is limited protection. Many policyholders are unaware that Citizens excludes common coverages that private insurers offer as standard.

These often include:

• Screened enclosures and lanais

• Detached structures like sheds or guest houses

• Certain water damage claims like water back up and sump overflow

• Law & ordinance coverage enhancements

While Citizens may offer basic coverage, it often leaves major gaps—gaps that can be financially devastating in the event of a claim.

Claims Handling: Delays and Lack of Accountability

Because Citizens insures a large volume of high-risk homes and older properties, their claims department is often overwhelmed—especially after major storms. Processing times can be significantly slower than with private insurers.

Under Florida’s Senate Bill 2A, private carriers must:

• Acknowledge a claim within 7 days

• Pay or deny a claim within 60 days

Private companies are held accountable for meeting these deadlines and face fines if they fall short. Citizens, on the other hand, is not held to the same standard, and delays are common—especially during catastrophe events.

For homeowners dealing with property damage, these delays aren’t just frustrating—they can be emotionally and financially devastating.

So, When Is Citizens the Right Choice?

There are circumstances where Citizens are the only option—and that’s exactly what it was created for. At Richard Dean Insurance, we do work with Citizens when appropriate, especially for homes in coastal areas or with risk factors that make private coverage unavailable.

But we also make a commitment to re-shop and review those policies regularly. Our goal is to move you into stronger, more comprehensive private coverage as soon as it becomes available—so you’re not stuck with limited protection and high risk.

Trust Richard Dean Insurance to Guide You

Choosing the right homeowners insurance isn’t just about the lowest price—it’s about knowing what’s actually covered, how claims will be handled, and what you’re financially responsible for in a worst-case scenario.

At Richard Dean Insurance, we work with dozens of private carriers across Florida, and we specialize in helping homeowners find strong, long-term solutions. Whether you’re currently with Citizens or exploring your options, our team is here to make sure you have the coverage you need—without hidden risks or surprise costs.

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Let’s make sure your policy works for you, not against you.

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