Florida regulators approved Citizens Property Insurance Corporation’s request for a 14% max rate hike for 2025.
This means, some homeowners policies in the state will increase this year but not by more than this 14% cap. The statewide average increase for the most common types of homeowner policies in a primary residence is estimated at 6.6%.
After deliberating for more than six months, the Office of Insurance Regulation posted its 17-page, final rate order on its website Thursday.
Citizens Spokesman Michael Peltier said in a statement the OIR’s thorough analysis was appropriate, especially after such an active hurricane season.
“The 2025 rates reflect the many positive developments that have taken place in the Florida property insurance market since our original recommendations were filed,” he said.
The decision followed the course of action set by the 2021 Florida Legislature, which states that Citizens’ annual premium rate cap should increase from 10% to 15% over a five-year period. As such, Citizens’ rates have gone up 1% each year since, forecasting a 15% rate cap for 2026.
That glidepath was one of several measures taken by the state in the last two years, targeting Florida’s insurance crisis, which has left some homeowners paying the most expensive premiums in the nation.
According to Mark Friedlander, director of corporate communications at the Insurance Information Institute, a data-driven industry group, Florida’s on track to stabilization. Which, he said, is great news for customers.
“Florida’s positive outlook is the result of significant legislative reforms that addressed the two man-made factors of the state’s risk crisis: legal system abuse and assignment of benefits claim fraud. Cost savings incurred by property insurers because of the declining volume of lawsuits are being passed down to their customers,” he said.
Instability hit the market after big payouts for storm damages proved unviable for dozens of insurers that either went bankrupt or left the state, leaving millions of households without insurance -- and Citizens to pick up the slack. The state-run and funded company was created to serve as a “last resort” for Florida homes too risky to get coverage in the private market.
However, Citizens became the largest policyholder in the state —and largest backstop insurer in the country— when it reached more than 1.4 million policies and a massive risk exposure gap of about $900 billion in liability in 2023. Because laws keep Citizens from raising its prices steeply, unlike unregulated private insurers, these rate changes and other policies are intended to make the company less competitive and get customers switching back to the private market.
Lisa Miller, the OIR’s former deputy commissioner and now CEO of her own government consulting firm in Tallahassee, said these lower costs are only possible now because state lawmakers took action to dramatically improve the property insurance market.
“The legislature would be wise to not entertain passing any laws that would undo the successes of their work for the past 3 years,” she said.
Because Citizens didn’t get every increase it proposed, some policyholders will actually see decreases in their premiums this year. Other policies, namely, Florida’s most common type, a personal line account for a home that’s used as a primary residence, was approved for a statewide average rate increase of 6.6% — less than half of the 13.5% hike Citizens requested.
Other main highlights from the OIR’s final order include:
- Non-primary residence accounts, like vacation homes, will see an average statewide increase of 17%, with a rate increase cap of 50%, as per legislation passed last year.
- Combined with the primary residences accounts, Citizens rate hikes will reflect a statewide, average premium increase of 8.6% for homeowners in 2025.
- The minimum cap allowed is -10%, which is how about 20% of policyholders will see decreases, averaging to -5.6% statewide, mostly in Miami-Dade and Broward counties.
All decisions in the order become effective June 1.
Lillian Hernández Caraballo is a Report for America corps member.
