One of Florida’s newest property insurers said it assumed roughly 30,000 policies from Citizens Property Insurance Corp., Florida's insurer of last resort.
Citizens has long sought to reduce its policy count through a so-called depopulation program, saying more private insurers writing coverage helps stabilize the market and keeps rates across the state from skyrocketing.
Florida's insurance market has come under scrutiny in recent years after some homeowners had their rates more than double following a series of hurricanes, a major factor contributing to the state's persistent housing affordability challenges.
Mangrove Property Insurance of St. Petersburg, Florida, approved by state regulators in January, said 86.4% of the Citizens policies it selected in April accepted the offer to switch insurers.
The 30,000 policies are Mangrove's first customers. The company said it expects to take additional policies from Citizens and begin writing new property insurance coverage on a voluntary basis across the Sunshine State.
Some policyholders must switch
Under terms of the depopulation program, policyholders who receive offers from Mangrove or any insurer aren't required to leave Citizens if they would be paying in excess of 20% more than their Citizens policies. Citizens policyholders who receive at least one offer below 20% of Citizens' rate must leave the company but can choose between multiple bids if they received more than one, according to a Mangrove spokesperson.
In December, Citizens announced its policy count had fallen below 1 million for the first time in more than two years. As of April 11, it had 843,518 policies.
“These are encouraging signs as we continue our efforts to return to our role as Florida’s insurer of last resort,” CEO Tim Cerio said in a December statement. “As Citizens shrinks, so does the risk of assessments on Floridians who are not Citizens policyholders. This should be welcome news to all.”
Florida's Office of Insurance Regulation announced that Mangrove was the 11th property insurer to enter the state since new legislative reforms took effect in 2022 and 2023. OIR approved a 12th insurer in Florida earlier this month.
The reforms included making it illegal for contractors to file insurance claims on behalf of homeowners, also known as "assignment of benefits, and eliminating one-way attorney fees that forced insurance companies to cover the legal costs of the plaintiffs suing them.
Mangrove said OIR approved the company to assume up to 81,040 Citizens policies between April and June.
“Our goal in this assumption was to invest in our long-term strategy, and to selectively underwrite policies that allow us to provide a stable source of capacity for the policyholders in partnership with the incumbent agents,” founder and CEO Stephen Weinstein said in a statement.
