The Hidden Risks of Citizens Property Insurance

Many Florida homeowners find Citizens Property Insurance offers the lowest home insurance quote. At first glance, it may seem like a great deal. After all, why pay more for coverage when a cheaper option exists? However, many homeowners don’t realize that Citizens was never meant to compete with private insurers. It was created as a state-run insurer of last resort, meant to provide temporary coverage when no other options are available. Despite this, some insurance agencies push Citizens policies simply because they generate easy sales when better comprehensive coverage is available. This practice leaves homeowners vulnerable to the hidden risks of Citizens insurance: limited coverage, slow claims processing, and unexpected assessments. These risks could end up costing clients more in the long run. Before choosing Citizens, it’s important to understand what you’re really signing up for.

Not a Permanent Solution

In 2002, the state of Florida created Citizens Property Insurance Corporation as a state-run insurer of last resort. It was created to insure those denied by private carriers like Tower Hill, American Integrity, and Florida Peninsula. The inability to secure affordable coverage was mainly due to the state’s high risk of hurricanes and severe weather. The program started as a temporary safety net. It gave homeowners an option when the private market pulled back. Over time, reliance on Citizens grew—and so did the hidden risks of its coverage.

In the last two years, Florida’s private insurance market has dramatically expanded and evolved due to Senate Bill 2A passed by the Florida Legislature. As a result, there is now less need to rely on Citizens than ever before.  Many insurers still write with Citizens due to limited access to the growing number of private carriers. This is especially common among large, nationally recognized companies like Allstate or State Farm. These companies have scaled back or left Florida’s home insurance market. To stay profitable, they now write policies through state-backed Citizens—a low-coverage option that carries no risk for them. By doing so, they continue to profit off the system while offering their clients limited protection. This practice undermines the state’s goal of transitioning homeowners into the stronger, more competitive private market. As long as homeowners continue turning to these big-name companies for coverage, Citizens will remain in operation longer than intended. In a shifting market, homeowners should treat Citizens as a temporary fix—not a long-term or default choice.

High Risk of Special Assessments

Since Citizens is a state-run insurance company, it operates differently from private insurers. Citizens doesn’t aim to make a profit, so it keeps smaller reserves than private insurers. It’s estimated to be about 40% underpriced compared to actual risk. If a major hurricane hits a dense area—like Miami, Tampa, or Orlando—Citizens may lack funds to cover all claims. When this happens, the company can issue special assessments to make up the shortfall. These assessments don’t just affect Citizens policyholders. Even Floridians with private insurance may have to help cover the costs.

In the event of a shortfall, Citizens policyholders can be charged up to 25% of their annual premium (a 15% regular assessment and up to a 10% emergency assessment), while non-Citizens policyholders can be assessed up to 10% of their annual premium. That’s hundreds or even thousands of dollars in surprise charges—on top of your regular insurance bill.

Private carriers follow strict regulations and must keep adequate reserves, but Citizens shifts more risk onto the policyholder. These assessments are a critical risk to consider, especially in a state as hurricane-prone as Florida.

Strict Eligibility & Forced Removals

Homeowners can only qualify for Citizens if private insurance options are unavailable or cost more than 20% above Citizens’ premium. Even then, if a private insurer later offers coverage, Citizens can force homeowners to switch by either non-renewing the policy or transferring it to another carrier through its depopulation program. This can leave homeowners scrambling to find coverage and paying higher rates than expected with little to no notice or no choice in the matter. It’s better to take control early and plan for better coverage than be surprised by a forced move later.

Lack of Coverage

Citizens Property Insurance offers stripped-down coverage compared to private insurers, often excluding common protections that homeowners assume are standard. For example, policies often exclude or limit coverage for screened enclosures, detached structures, and certain types of water damage. While Citizens does offer replacement cost coverage on personal property, their overall policy limitations can still leave major gaps in protection.

Difficult Claims Process & Delays

Citizens handles a high volume of claims, which can result in slow processing times and frustrating delays for homeowners. Much of this volume comes from the fact that Citizens frequently insures higher-risk properties—such as homes in coastal or disaster-prone areas—that private insurers may avoid. These types of claims are often more complex and time-sensitive, especially following a major storm or hurricane.

As a state-run insurer meant to be temporary, Citizens is not scaling up to meet growing demand—in fact, it’s actively trying to shrink. This means it lacks the personnel and resources needed to process claims quickly and efficiently, especially during catastrophe events when thousands of homeowners are filing at once.

By contrast, private insurers are held to strict timelines under Florida’s Senate Bill 2-A. They must acknowledge a claim within 7 days and make a coverage decision—or issue payment—within 60 days. If they miss these deadlines, the state will fine them. But because Citizens is a government-backed insurer, it is not subject to those same penalties, meaning it can take significantly longer to respond.

For homeowners already under stress from property damage, these delays can be financially and emotionally devastating.

Choose Comprehensive, Long-Term Coverage

While Citizens Insurance may seem like a budget-friendly option, the long-term risks can make it a costly mistake. Limited coverage, long wait times, and the risk of unexpected costs are just a few of the challenges homeowners face.

At O’Quinn Insurance, we believe in guiding homeowners toward real, sustainable solutions—not just quick quotes that leave them exposed to hidden risks. Our team works with over 60 carriers (including Citizens) to find the right coverage tailored to your needs, ensuring you have a policy that truly protects your home, your family, and your financial future. While Citizens may be the right choice for some in the short term, we’re committed to reviewing and re-shopping policies to ensure that you aren’t left at risk longer than necessary.

Ready to explore your options and ensure you have the right coverage? Call us today or fill out our form for a free consultation with our team of experts. We’re here to help you find the best solution to protect your home, your family, and your future—without the hidden risks. Let us guide you toward the peace of mind you deserve.