Citizens Update: Proof of Primary Residence Verification in Florida

November 2, 2023

Homeowners in Florida recently received a letter informing them about changes happening with Citizens Insurance. Some homeowners may have also received letters requesting proof of primary residence. These changes are part of a broader effort to stabilize the insurance marketplace in Florida.

Citizens Insurance, also known as Citizens Property Insurance Corporation, is a state-run insurer of last resort in Florida. It was established by the Florida legislature to provide property insurance coverage to homeowners and businesses who cannot obtain coverage from private insurance companies. Citizens primarily offers coverage in high-risk and hard-to-insure areas, particularly along the coast.

However, over the past five years, Citizens Insurance has experienced significant growth, with over 1.3 million policyholders. Ideally, the insurer should have around 300,000 policyholders to maintain a healthy marketplace. The current size of Citizens has raised concerns about artificially low rates, financial risks, market distortions, and the potential for policyholders to face assessments in case of insolvency.

To address these issues, recent legislative changes were made in Florida, particularly during the December 2022 special session. As part of these changes, Citizens now has the authority to increase rates by up to 50% for non-primary residences. The main reasons behind these changes include:

  1. Rate Stability: By differentiating between primary and non-primary residences, the state aims to achieve more stable and actuarially sound insurance rates.
  2. Financial Risk Reduction: The state intends to reduce its exposure to potential insolvency situations and avoid financial burdens associated with claims that Citizens cannot cover.
  3. Assessment Risk Mitigation: Policyholders face the risk of additional costs if Citizens runs out of funds for claims. Reducing the size of Citizens can mitigate this risk.

If your property qualifies as a primary residence, meaning you live in it for nine months or more per year, or it is rented annually, you can benefit from a rate cap, typically averaging about 12%. Citizens will need to verify your occupancy using various documents, such as a homestead exemption, voter registration card, Florida driver’s license, Florida identification card, military papers showing your address, utility bills, or vehicle registration.

However, if your property does not meet the criteria for a primary residence or annual rental, you may be subject to a higher rate increase. In such cases, it is advisable to explore alternative insurance options outside of Citizens. Shopping your policy to another carrier can provide you with competitive rates.

HH Insurance, founded in 2018, is committed to providing the best insurance solutions and customer service. We automatically shop policies for our customers to ensure they get the best rates. If you are not already a customer, HH Insurance is ready to assist you in finding the right insurance coverage.

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