Citizens Insurance gets bump in cash to cover hurricane damage

Citizens Property Insurance secured more funding to help Floridian cover costs of storm damage such as that seen in Hurricane Ian in 2022.

Florida’s insurance safety net company has increased its ability to cover damage claims from hurricanes.

Citizens Property Insurance Corp. announced that the organization is purchasing $3.56 billion for reinsurance for the remainder of the Hurricane Season, which runs through Nov. 30. The move gives Citizens the financial resources to cover a 1-in-83-year storm, a news release from Citizens said.

Citizens Property Insurance is the company established by Florida to insure businesses and homeowners in the state who are turned down by private insurance carriers. It is a nonprofit organization.

Citizens Chief Financial Officer Jennifer Montero addressed the Citizens Board of Governors Wednesday and said the organization has secured coverage for $482 million. That figure combined with surplus for Citizens and coverage provided by the Florida Hurricane Catastrophe Fund allows Citizens to cover up to $14.4 billion in claims in the state.

“We have always structured our reinsurance program based on our expected needs and the conditions of the global reinsurance market,” Montero said. “We followed that same strategy and believe the 2024 reinsurance program ensures Citizens has the strong financial ability to pay claims.”

Citizens would first levy a surcharge on its policyholders if losses exceed $14.4 billion, a 1-in-74-year hurricane. For comparison, the Citizens officials said, Hurricane Andrew in 1992 was an approximately 1-in-43-year event, while Hurricane Ian in 2022 was an approximately 1-in-20- up to 1-in-25-year hurricane. Citizens would assess all Florida consumers with homeowners, automobile, boat, and other property and casualty insurance if a deficit still existed.