Citizens Property Insurance shrinking, State Farm now largest insurance company

SAFETY HARBOR, FLA. — Florida's state-backed insurer of last resort is no longer the largest insurance company in the state, marking a significant milestone in the state's recovery from its insurance crisis.

Citizens Property Insurance has been aggressively moving policyholders off its books through a process called depopulation, with nearly 200,000 policyholders impacted in October alone and another 129,00 in November.

WATCH: Citizens Property Insurance shrinking more by the day, State Farm now largest insurance company in Florida

'It's good news for everyone'

"It's good news for everyone," said Michael Peltier, spokesperson for Citizens Property Insurance. "Historically, when the market is facing challenges, citizens, property, policy count goes up. When the market gets healthy, then our numbers go down.

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The state insurer, which once held 1.4 million policies, is now down to 437,097 policies as of this week, meaning it's no longer Florida's largest insurance company. State Farm is now the largest, with its 646,429 policies as of August, according to data from the Office of Insurance Regulation.

"What I think is encouraging too, is that about 40% of those policies, the takeout premium was actually less than what the Citizens' premium was. So consumers are now starting to see more choices in the market," Peltier said.

Citizens Property Insurance

'It's just our turn'

For homeowners like Eric Clauss of Safety Harbor, the transition means navigating unfamiliar territory. Clauss has spent two years hardening his home against hurricanes, installing new windows and reinforcing his property to potentially lower his premiums.

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"I figured out it's just our turn. I mean, what are you going to do? You know, they're going to do what they're going to do," Clauss said.

The depopulation process works through takeout offers from private insurance companies. If a private insurer offers coverage for no more than 20% above what a homeowner pays Citizens, the policyholder is required to accept the new coverage.

Clauss received an offer from Slide Insurance that increased his premium by about $40 per year.

"We're going to move you to Slide Insurance, which, I mean, it's really not horrible. The rate only went up. I want to say I think it was about $40 a year for the premium, but it's like, where did Slide come from?" Clauss said.

An insurance agent's perspective

Insurance industry experts say the depopulation represents positive news for Florida's insurance market. Jake Holehouse with HH Insurance Group said the increased competition benefits both the state and consumers.

"I think it's incredible news for the marketplace. You know, Citizens was not designed to be the largest insurance company in Florida," Holehouse said.

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Almost always, policyholders question the new company they are now forced to go with, especially if they are one of the 17 that recently entered Florida's market. For policyholders concerned about unfamiliar insurance companies, Holehouse emphasized that all participating carriers are admitted insurance companies regulated by the state's Office of Insurance Regulation.

"I think it's a great concern. Now, one really big thing is that every carrier participating in the takeouts is what's called an admitted insurance carrier. That means that they're regulated by the Office of Insurance Regulation at a state level," Holehouse said.

'Time will tell'

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For Clauss though, it comes down to two main points: How much is premium? And will this private company come through for him when he needs it most?

"The politicians may say things are going to get better, but are they really, and really the biggest reflection is all that for real, or is it just the story is what this number will look like come the next renewal, you know?" Clauss said.

"Time will tell. I could hear all kinds of fancy stuff, like, yeah, the rates are going to get lower. Yeah, this is going to happen. Yeah, that's going to happen. It's like, great, show me."