The Sun Sentinel reported “New data provided by state-owned Citizens Property Insurance Corp….shows that the company dropped 2,267 policies statewide during the 12-months ending June 30 because their homes’ replacement value exceeded $700,000.”

The eligibility cap is set at $700,000 for all counties except for Miami-Dade and Monroe both of which have $1m caps. However, as many Monroe County homeowners know, the replacement values are exceeding the $1m cap causing Citizens to drop many Monroe County policies. Citizens truly is the “insurer of last resort” for Monroe County, and some homeowners have reported to FIRM that they are unable to obtain insurance in the private market. This is a concerning trend especially as we approach the height of the 2022 hurricane season.

What is driving the trend?

The Sun Sentinel explains the reasons behind this increase in home values:

“Unlike a home’s market value that measures how much money you could get by selling your home and the land it sits on, replacement values measure what it would cost to replace a structure. White a hot real estate market can drive up a home’s asking price, replacement-value increases are a result of inflation driving up costs of building materials, energy and labor.”

In 2013 the Florida Legislature decreased coverage limit to $700,000. Because the Florida Office of Insurance Regulation (OIR) determined there is not a reasonable degree of competition in Miami-Dade and Monroe counties, these two counties were exempt from the decreased coverage limit of $700,000. The maximum coverage limit of less than $1 million continued to be applied to risks in these two counties.

Florida regulators are studying the caps

Following the drop in Monroe County policies that began last year, increasing that cap became a legislative priority for FIRM in the 2022 legislative session. With no major property insurance bills being passed, it remains a priority for FIRM heading into the 2023 session.

And now the Office of Insurance Regulation (OIR) is stepping in to review the cap.

“The trend has prompted the state to undertake a study of the $700,000 cap, instituted so that taxpayers don’t end up subsidizing wealthy homeowners who can afford private insurance to cover homes worth more.”

Unfortunately homeowners who aren’t wealthy but whose home values have risen sharply are being dropped and are unable to find coverage in the private market.

“If the OIR finds that homeowners can’t get affordable coverage from private market insurers, the caps could be increased in Broward, Palm Beach and other counties. The study will analyze all 67 Florida counties.”

FIRM and its lobbyists are already working with Rep. Mooney and Sen. Rodriguez to ensure that the OIR closely analyzes Monroe County’s current coverage cap.

If Citizens has dropped your policy and you’re unable to find coverage in the private market, let your legislators know.


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