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Citizens Insurance- Too Good to be True or Saving Grace we Need?

Citizens Insurance- Too Good to be True or Saving Grace we Need?

Like kids on a hot summer day running towards the ice-cream truck, homeowners have been switching over to the state-funded Citizens Insurance. Standard home insurance companies have all been making us sweat bullets watching their prices increase drastically from year to year. So, when sweet relief comes around the corner in the form of affordable home insurance, we all flock towards what we consider as our saving grace. In 2022, Citizens saw an increase of 50% in new business. Over the last 3 years, it’s nearly doubled its customers.

On many of the social media forums that I’m part of, agents have been telling residents that their only real option for insurance is with Citizens. That’s just not true. For the many newer, pop-up agents this may be true, but the long-standing agents that have been here for 30+ years usually have other options for the local homeowners. Many agents are also using Citizens as the first choice in placing coverage because it looks cheaper, but really Citizens is intended to be last resort insurance coverage when all other options are exhausted. If you are faced with a situation in which you need to choose a Citizens Insurance policy versus what we call a company with an admitted market (more like mainstream companies that you don’t need to go through specialized brokers to get), know what you’re getting into before you go with their “cheaper” rate.

The True Cost of Citizens Home Insurance

  • The price you get quoted and agree to pay is not always the final price. They can charge multiple additional hidden fees. There are two different types of assessments (fees) Citizen’s policyholders can be required to pay: Citizens Policyholder Surcharge (one-time fee) and Emergency Assessment Fee. The first is a fee “Citizens policyholders can be assessed up to 45 percent of their total premium if Citizens needs additional funds to pay claims following a major disaster. Non-Citizens policy holders can be assessed at a much lower (2 percent) rate.” The second fee is the Emergency Assessment which is up to 30% of premium per year until remaining deficit (from claims) is eliminated. These fees are separate and can happen in the same year.
  • Flood Insurance will soon (2024) be required for all Citizens Policies. Currently, anything with Citizens in a Flood Zone is required to have Flood Insurance but starting in 2024 all of their policies with Wind Coverage must also carry Flood Insurance. This will likely cost thousands extra to your home insurance.
  • Just this last week, the Citizens approved an across-the-board rate increase of 14%. Those super cheap premiums may not seem so alluring in the upcoming year. Since their eligibility states that competing quotes must be at least 20% more than what Citizens offers, there will probably be little difference between a standard company’s premium price and Citizens.

Government Quality of Service

Imagine the frustration you have felt at the DMV. Now think of the stress you have placing a claim with your insurance company. Now combine those two.  Since Citizens is a state-run organization, it’s wrapped in the same red tape as other government organizations. Wait times are long and conversations with representatives can lead nowhere based on their strict rules and underwriting guidelines.


  • Coverage only goes up to $700,000. The average home value in Destin is around $650,000. Many homes in the area won’t even be eligible for Citizens because the value of their home is so high. And if you decrease the value of your home to fit within the $700,000 you’ll be risking not being able to rebuild if you have a total loss claim.
  • Liability and Medical payments are limited to basic coverage compared to standard companies. In the case of Citizens Liability is limited to $100,000 (we recommend $500,000) and medical coverage is limited to $2,000 (we recommend at least $3,000).

With the surge of homeowners switching over to the state-funded insurance, there’s been a looming question of if the state can support paying out the claims for millions of people after a disaster. In perspective, the recent Hurricane Ian, Citizens estimates 3.8 Billion in damages and 78% of claims being handled within 90 days of the storm. Citizens says they have only used 2.4 Billion of the reinsurance surplus and they are confident they can pay the rest of the claims. The beginning of 2023 the Florida Legislature created a state-funded reinsurance program to help ensure the financial security of participating home insurance companies. With this added measure, Citizens may prove to be the saving grace that spent Florida homeowners need- as long as you can deal with the potential hidden fees and lack of coverage options and service.