TALLAHASSEE — Florida’s property insurance market, already under intense strain, could see a major shift under legislation filed this session. Senate Bill 634, sponsored by Sen. Nick DiCeglie, proposes removing statutory limits on annual rate increases for new Citizens Property Insurance Corporation policies and their renewals.
Citizens, the state-backed insurer of last resort, has long operated under a “glide path” system that caps annual premium hikes at roughly 12 to 14 percent. The system was designed to protect homeowners from sudden spikes in costs while keeping Citizens coverage affordable in areas where private insurers have pulled back. SB 634 would carve out an exception: any new policy written after a specified date, along with subsequent renewals of that policy, would no longer be subject to the cap.
The bill arrives at a time when Citizens has ballooned to more than 1.3 million policies, making it Florida’s largest property insurer. State officials have warned that this growth poses a significant financial risk, since Citizens is ultimately backed by taxpayers. If a major hurricane were to strike, the corporation could face billions in claims, leaving the state to cover the shortfall.
Supporters of SB 634 argue that the glide path has kept Citizens’ rates artificially low, discouraging homeowners from returning to private carriers and creating an imbalance in the market. “We need to make sure Citizens is not the most attractive option,” DiCeglie said in a committee hearing. “The goal is to stabilize the market and reduce taxpayer exposure.”
Critics, however, warn that the measure could make coverage unaffordable for new homeowners, particularly in coastal and high-risk regions where Citizens is often the only available option. Consumer advocates say families entering Citizens after the cutoff date could face steep, market-driven increases year after year, creating a divide between existing policyholders who remain protected and new ones who do not. “This bill essentially tells new Floridians, ‘You’re on your own,’” said Karen Lopez, a Daytona Beach homeowner who testified against the proposal. “It’s going to price people out of their homes.”
The debate reflects broader challenges in Florida’s insurance market, which has been battered by litigation, fraud, and catastrophic storm losses. Regulators recently approved a 14 percent maximum rate hike for Citizens, with an average increase of 6.6 percent statewide. SB 634 builds on that trajectory, signaling a shift toward market-based pricing rather than state-controlled limits.
Industry experts say the measure could help reduce Citizens’ exposure but acknowledge the political risks of raising rates. “It’s a tough balance,” said Michael Hanzel, an insurance analyst based in Tampa. “On one hand, you want to protect consumers from unaffordable premiums. On the other, you can’t have a state-backed insurer carrying this much risk.”
If enacted, SB 634 would mark a turning point in Florida’s approach to balancing consumer protection with fiscal responsibility. For lawmakers, insurers, and homeowners alike, the proposal raises pressing questions about affordability, risk, and the future of property insurance in a state where hurricanes remain a constant threat.
The bill is expected to be taken up in committee in the coming weeks, setting the stage for what could be one of the most consequential debates of the legislative session.
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