Florida’s residential and commercial property insurance sector is poised for significant restructuring following a new legislative proposal aimed at reducing the state-run Citizens Property Insurance’s portfolio. The measure, approved by the House on Monday with an 88–19 vote, now awaits Governor Ron DeSantis’ signature. It mandates that Citizens establish two new clearinghouses by 1 January 2027 to facilitate the transition of certain policies to private insurers.
Under the proposed framework, one clearinghouse will allow licensed insurers to make “takeout” offers for commercial and residential policies. The second clearinghouse is designed for surplus lines insurers, which are not licensed in Florida but may qualify as “eligible” carriers to provide coverage through this mechanism.
Representative Mike Redondo, who sponsored the bill, stated, “By transferring policies from Citizens, we strengthen Florida’s insurance system. Property owners will have more options, and those offered coverage through the surplus lines clearinghouse are not obligated to remain with Citizens. They may explore the market if they wish.”
However, some lawmakers urged caution. Representative Allison Tant warned, “Customers should not be forcibly removed from Citizens, and surplus lines policies require enhanced oversight.” Representative Jose Alvarez added, “This legislation preserves Citizens as the insurer of last resort while allowing the private sector to enter the market, fostering healthy competition and potentially lowering premiums.”
Over the past decade, Citizens has attempted to reduce its policy count through clearinghouse mechanisms. In October 2023, the insurer held approximately 1.41 million policies; that number has now fallen to around 336,000.
Proposed 2026 insurance rate adjustments are summarised in the table below:
| Policy Type | 2026 Rate Change | Notes |
|---|---|---|
| Homeowners Multi-Peril | -8.8% | Most common policy |
| Wind-Only Homeowners | -5.5% | Covers wind and storm-related damage |
Surplus lines insurers must meet strict requirements to participate, including at least five years of audited financial statements, an “A minus” or higher financial strength rating, and an A.M. Best Company “A-VII” rating.
Insurance Commissioner Mike Yaworsky cautioned, “New premiums, coverage terms, and other provisions will not be disclosed until the day before policy renewal, which may pose challenges for policyholders navigating the current market.”
Experts suggest that while the proposal and rate reductions may lower short-term costs, premiums could rise again in the future. Nonetheless, the reforms mark a major step in reducing Citizens’ burden and increasing private-sector engagement, creating greater choice and competition for Florida homeowners and commercial property owners alike.