If you’re a South Florida homeowner insured by Citizens Property Insurance Corporation, you’ve likely heard the term “depopulation” and may have even received a notice in the mail. This state-mandated program is aggressively transferring hundreds of thousands of policies back to the private market.
While the goal is to stabilize Florida’s insurance system, for you, the homeowner, it means confusion, uncertainty, and a critical decision about your home’s financial protection. Here is a breakdown of what depopulation means for your policy and your wallet.
What is Depopulation and Why Is It Happening?
Citizens was created as Florida’s property insurance company of “last resort” a safety net for those unable to find coverage elsewhere. However, due to the crisis in the private market, Citizens swelled to become the state’s largest insurer, holding over a million policies at its peak.
The Florida Legislature launched the Depopulation Program to reduce the size of Citizens.
- Goal 1: Reduce Financial Risk. If a catastrophic storm hits, a massive Citizens policy count means the state-run insurer could face a deficit, forcing it to levy a surcharge on all Florida policyholders (even those with private insurance) to cover the difference. Reducing Citizens’ size mitigates this statewide risk.
- Goal 2: Stabilize the Market. The program encourages new and existing private insurance companies (known as “takeout carriers”) to assume these policies, bringing much-needed stability and competition back to the private market.
Your Two Options When You Get a Takeout Offer
If a private company selects your policy, you will receive an official Depopulation Packet with an offer of coverage from that company. Your next move depends entirely on the price of that offer compared to your Citizens renewal premium.
1. The Mandatory Transfer (The 20% Rule)
What it means: If the premium offered by the private company is less than 20% higher than your estimated Citizens renewal premium, you are generally ineligible to remain with Citizens.
- Your Action: You must accept the private offer or find a different, more favorable policy elsewhere in the private market. If you receive multiple offers that meet the 20% rule and you don’t respond, Citizens will automatically assign you to the lowest-priced option.
- The Wallet Impact: The private policy will likely be more expensive than Citizens (potentially up to 19.9% higher). However, you gain a significant benefit (see Section 4).
2. The Optional Transfer (The Opt-Out)
What it means: If the private company’s offer is 20% or more higher than your estimated Citizens renewal premium, you have the option to opt out and remain with Citizens.
- Your Action: You must actively inform Citizens (usually online or through your agent) that you are declining the offer to keep your coverage with them.
- The Wallet Impact: Your premium stays with Citizens, which is likely the lower price point, but you retain the significant risk of future Citizens assessments.
The True Financial Risk of Staying with Citizens
While the lower premium of a Citizens policy is tempting, it’s crucial to understand the Assessments the true financial liability you hold as a Citizens policyholder.
| Assessment Type | Who Pays | Potential Cost | The Catch |
| Citizens Policyholder Surcharge | Citizens Policyholders ONLY | Up to 15% of your annual premium. | If Citizens runs a deficit after a major storm, you are the first line of defense. |
| Emergency Assessment | ALL Florida Policyholders | Up to 10% of premium annually. | This is levied on Citizens and private policyholders statewide, and can last for multiple years until the deficit is cleared. |
The Bottom Line: A private policy might cost you slightly more year-to-year, but it removes your liability for the 15% Citizens Policyholder Surcharge. Accepting a takeout offer is often a trade-off: a slightly higher premium for much lower catastrophic financial risk.
What South Florida Policyholders Must Do Now
- Read Every Letter: Do not discard any mail from Citizens or a potential takeout carrier. Note the deadlines immediately.
- Compare Coverage: Citizens policies often have limited endorsements. Ask your agent if the private offer provides broader coverage (e.g., higher liability limits, screened enclosure coverage, water backup coverage).
- Vet the New Company: Research the financial stability and claims reputation of the takeout carrier on the Florida Office of Insurance Regulation (OIR) website before accepting their offer.
This process is complex, but ignoring it can result in a more expensive policy or, worse, unintended gaps in your coverage.
Do you have a specific takeout letter you would like me to help you compare against your current Citizens policy?