Citizens Property Insurance Corporation could potentially face billions of dollars in property claims along the Gulf Coast where Hurricane Idalia will make landfall on Wednesday. Citizen’s total exposure outnumbers other carriers by a long shot, with $72 billion for the policies in place in the eight coastal counties that are expected to have winds reach over 110 mph.

Citizens currently has an estimated 190,700 policies that include wind coverage in Pinellas, Pasco, Hernando, Citrus, Levy, Dixie, Taylor, and Jefferson counties. Castle Key Indemnity Co. has the next highest number of policies at approximately 28,000 policies amounting to roughly $9.95 billion on exposure. The total exposure of every carrier that holds policies in the areas mentioned above is not known since many larger companies do not report certain information due to trade secrets exemptions.

Citizens has ballooned in policy holders in recent years, becoming a widespread concern. Industry analysts say Hurricane Idalia could have dire financial consequences for the “last resort” insurer, as Hurricane Ian significantly depleted funds last year. Citizens surplus declined $1.9 billion, to total $4.9 billion after the 2022 hurricane season according to their annual report. Citizens does have around $6 billion in reimbursement through the Florida Hurricane Catastrophe Fund, and $5.8 billion of private risk transfer available.

When Hurricane Ian hit Florida last year, it hit an area that Citizen’s does not have a huge market concentration. Still, according to Bruce Lucas, Slide Insurance CEO, the storm cost Citizens $4 billion. Citizens has a vulnerable position since it charges rates far lower than private insurers, typically in the risky coastal areas. According to Lucas, Citizens is only a Category One hurricane away from being wiped out. For Florida consumers, this is bad news as they are on the hook for Citizens claims if funds become depleted. Recently, state regulators denied a request from Citizens to raise rates by 13%. Even if the rate hike had been approved, Citizens costs would have still been on average below 44% below private market rates. 

If you are located in the West Central Florida market area, Cliggitt Valuation, Inc. is ready to help you with your appraisal and valuation needs. We provide appraisals for a variety of scenarios including FEMA 50% Rule Appraisals and Insurable Value Appraisals.