Over the last few years, Citizens Property Insurance Corporation, Florida’s state-backed “insurer of last resort,” has grown tremendously as many private insurance companies went bankrupt, pulled out of the Florida market, or went insolvent after numerous storms and years of litigation abuse and contractor fraud. However, after major legislative changes the property market in Florida is actually softening so Citizens is now actively trying to reduce their policy count through a process called depopulation. If you’ve recently received a letter about your Citizens policy being taken out, you may be wondering what this means for you. Let’s break it down.
What Is Depopulation?
Depopulation is the process where Citizens encourages private insurance companies, known as takeout carriers, to assume policies currently insured with Citizens. Instead of renewing with Citizens, your coverage could be transferred to a private insurer who has agreed to offer you comparable terms. In short, it’s Citizens way of moving policies back into the private market.
Why Is Citizens Depopulating Policies?
Citizens was created to be a safety net for homeowners who can’t find coverage elsewhere, not to be the largest insurer in Florida. In 2020, they had just over 500,000 policies, but by the end of 2023, the policy count hit over 1.4 million. Citizens started aggressively depopulating policies when the market corrections occurred shortly after the major legislative changes in 2023. Now as of the end of August 2025, Citizens now has fewer than 800,000 policies, and the count seems to be getting smaller by the day.
When Citizens has too many policies, it puts all Floridians at financial risk, since a major storm could lead to surcharges on every policyholder in Florida, even if you don’t have Citizens.
Depopulation helps:
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Reduce the number of policies Citizens carries.
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Spread risk back into the private market.
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Protect Floridians from statewide assessments in the event of catastrophic losses.
Am I Required to Accept Coverage from a Takeout Carrier?
In short, it depends. There are typically 2 different types of depopulation offers:
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Option to stay with Citizens – If the premium for all of the alternative options is over 20% of your expected Citizens renewal, you can stay with Citizens, but you need to ensure you make this selection prior to the depopulation date.
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No option to stay with Citizens – If any offer you received was either less than or within 20% of your expected Citizens renewal premium, then you will be forced to accept the offer. If you received multiple offers, you need to make sure to select a carrier before the depopulation date.
It’s important to note that your premium does NOT change until your next renewal date. The takeout company assumes any claims responsibility after the depopulation date listed on the letter, but your premium will not change until your normal renewal date.
The key is to review the assumption letter carefully. The letter will outline your options and the timeline to respond.
What Are the Benefits of the Private Market Over Citizens?
While Citizens can feel like the “safe” option, private insurers often provide stronger coverage and more flexibility. Some benefits of the private market include:
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Broader Coverage Options – Private carriers may offer higher liability limits or endorsements, such as water backup, personal injury, or screened enclosure coverage for hurricane loss.
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Lesser chance of surcharges – Citizens can levy assessments of 15% of the annual premium if it is not able to cover their claims.
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No requirements for flood coverage – Although we always suggest purchasing flood coverage regardless of your flood zone, Citizens is mandating flood coverage for all residences. If you want consumer choice, the private market is your best alternative.
What Options Do I Have If My Property Is Depopulated by Citizens?
If you receive a depopulation notice, here’s what you can do:
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Review the Offer – Compare the takeout carrier’s proposal with your current Citizens coverage. Look closely at limits, deductibles, and endorsements, not just price.
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Work With Your Agent – An independent agent (like Insurance Resources) can help you evaluate whether the private offer is in your best interest.
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Explore Other Carriers – Even if a takeout company makes an offer, you may have options with other private insurers who aren’t part of the depopulation program. We typically suggest you take the takeout offer that will not require inspections and then re-market during your normal renewal date.
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Stay With Citizens (in some cases) – If the offer doesn’t meet Citizens’ rate guidelines, you may be eligible to remain with Citizens.
Bottom Line
Citizens’ depopulation can feel confusing, but it’s part of Florida’s effort to return risk to the private market and keep Citizens financially stable. The good news is you don’t have to navigate it alone. At Insurance Resources, we work with most of the Florida homeowner’s markets, and we can walk you through your options to ensure you’re properly covered at the best possible value.
