The Citizens Exit Guide: What to Do When a Private Carrier Takes Out Your Policy
Received a Citizens depopulation letter? Learn the 20% rule, how to vet your new Florida carrier, and the 2026 steps to protect your home and premium.
Key Takeaways
- If a private carrier offers you a premium within 20% of your Citizens renewal price, Florida law makes you ineligible to stay with Citizens — you must accept or find another private option.
- Citizens has shrunk from 1.4 million policies in 2023 to roughly 392,000 by early 2026, meaning depopulation is accelerating and your letter is not unusual.
- You can vet any takeout carrier in about 15 minutes using Demotech ratings and the Florida OIR website — do not skip this step.
- An independent insurance agent can shop 40+ carriers on your behalf, often finding better coverage at a lower price than the takeout offer in your packet.
If you just received a Citizens depopulation letter, here is the short answer: a private insurance company has been approved by the state to take over your policy. If their premium is within 20% of what Citizens would charge you at renewal, you are required by Florida law to leave Citizens — but you still have options, and this guide walks you through every one of them.
Why You Received the "Depopulation" Packet
If you are holding a thick envelope from Citizens Property Insurance with the word "depopulation" on it, take a breath. You are not being dropped, canceled, or left without coverage. What is happening is part of a deliberate, state-mandated program to move policyholders out of Florida's insurer of last resort and back into the private market.
Citizens was never designed to be a permanent home for Florida homeowners. The Florida Legislature created it in 2002 as a safety net for people who genuinely could not find coverage elsewhere. At its peak in late 2023, Citizens held roughly 1.4 million policies — far more than intended. That number has dropped dramatically. As of mid-February 2026, Citizens holds approximately 391,768 policies, the lowest count since at least 2012. In 2025 alone, over 585,000 policies were transferred to private insurers, removing $235.6 billion in exposure from the state-backed insurer.
This massive shift was made possible by Florida's 2023 tort reform (HB 837) and the 2024 depopulation expansion (HB 1503), which together brought more than 15 new carriers into the Florida market and allowed surplus lines insurers to participate in the depopulation program for the first time. The market is stabilizing, and that is why your letter arrived.
One of our longtime clients (Silvia) reached out to us recently after receiving her second depopulation notice in three months. She was upset. The first depopulation notice ended in the other company not taking her policy leaving her in limbo. This second one we shopped her insurance around and found an alternate price entirely avoiding the depopulation mess entirely.
The 20% Rule Explained: Can You Stay with Citizens?
This is the single most important number in your depopulation packet. Florida law establishes what is commonly called the "20% rule," and it determines whether you have a choice or not.
Here is how it works. Citizens calculates what your renewal premium would be. The private carrier that selected your policy submits their offer. If the private carrier's premium is at or below 120% of your Citizens renewal premium, you are automatically moved to the private carrier. You do not get to opt out.
The formula looks like this:
For example, if your Citizens renewal premium would be $3,000, and the private carrier offers you $3,500, that offer is within 20% ($3,600 would be the threshold). You would be required to accept the private carrier — or find a different private carrier on your own. You cannot stay with Citizens.
If the private carrier's offer exceeds 120% of your Citizens premium, you have the right to opt out and remain with Citizens. But you must respond by the deadline printed on your "Offer Form" using the Registration Code included in your packet. If you ignore the letter entirely, you will be automatically transferred to the private carrier regardless of the price difference.
The bottom line: Open your packet, find the premium comparison page, and do the math. If the offer is within 20%, start evaluating the new carrier. If it is above 20%, you can decline — but you still might want to consider the private option if the coverage is better.
Is Your New Company Stable? How to Vet 2026 Takeout Carriers
This is where most homeowners feel the most anxiety. You have heard the stories — Florida insurance companies going insolvent, leaving policyholders scrambling. Between 2020 and 2023, several Florida property insurers failed. So how do you know if the company in your depopulation packet is solid?
The good news is that every carrier participating in the depopulation program has been approved by the Florida Office of Insurance Regulation (OIR). But "approved" and "financially strong" are not the same thing. Here is how to check for yourself.
Checking Financial Stability: Demotech vs. AM Best
Most Florida-focused property insurers are rated by Demotech, not the more widely known AM Best. Demotech provides Financial Stability Ratings (FSRs) specifically designed for regional and state-focused carriers. Look for a rating of "A" (Exceptional) or higher. Demotech currently rates most of the 55 Florida-based property insurance companies.
Some of the major 2026 takeout carriers and their standing:
| Carrier | Type | What to Know |
|---|---|---|
| Slide Insurance | Insurtech carrier | Active in depopulation; had a consent order in Feb 2025 — verify current Demotech rating |
| American Integrity | Traditional carrier | One of Florida's largest; had a consent order in Jan 2025 — check for resolution |
| Manatee Insurance Exchange | Reciprocal exchange | Newer model where policyholders share risk; verify surplus levels |
| Southern Oak | Traditional carrier | Demotech FSR "A" (Exceptional); established Florida presence |
Many of the newer Florida carriers are structured as "reciprocal exchanges" — a model where policyholders essentially insure each other through a shared pool. This is not inherently bad, but it is different from a traditional stock or mutual insurance company, and you should understand the structure before committing.
The 3-Step "Solvency Search" Checklist
You can vet any carrier in about 15 minutes:
| Step | What to Do | Why It Matters | Time |
|---|---|---|---|
| 1. Check the Demotech Rating | Visit demotech.com and search for the carrier name. Look for an FSR of "A" (Exceptional) or higher. | A strong FSR means the carrier has sufficient surplus and reserves to pay claims, even after a major hurricane. | 5 minutes |
| 2. Search Florida OIR for Consent Orders | Visit floir.gov/resources-and-reports/orders-and-memoranda and search for the carrier name. | A consent order means the state found a problem — it could be minor (a reporting issue) or serious (financial instability). Read the actual order. | 5 minutes |
| 3. Check the NAIC Complaint Index | Visit naic.org/cis and look up the carrier's complaint ratio. A ratio above 1.0 means more complaints than average for a company that size. | High complaint ratios often signal claims-handling problems — the last thing you want after a hurricane. | 5 minutes |
Free Download: "Takeout Letter Decoder" PDF — A one-page printable sheet that shows you exactly which numbers on your depopulation packet to compare, how to calculate the 20% threshold yourself, and where to find your Registration Code and response deadline. Keep it next to your packet so nothing falls through the cracks.
Need help evaluating your specific offer? Call us at (904) 900-5063 [blocked] or request a free quote — we will compare the takeout offer against 40+ other carriers to make sure you are getting the best deal.
What Is Changing in 2026: Market Trends Affecting Your Decision
The Florida property insurance market in 2026 looks dramatically different from even two years ago, and these changes directly affect whether staying with Citizens or moving to a private carrier makes more sense for you.
The Market Is Cooling — In Your Favor. The 2023 tort reform (HB 837) eliminated one-way attorney fees in property insurance lawsuits and restricted assignment of benefits (AOB) abuse. The result has been significant: more than 15 new carriers have entered or re-entered the Florida market, and Citizens itself is reducing rates for homeowners multiperil policies by an average of 8.8%. The Florida OIR reports that insurance costs statewide are now 14.5% lower than their peak. This means the private offer in your packet may actually be competitive — or even cheaper than Citizens.
Climate Risk Is Still the Wild Card. Despite the improving market, Florida remains the most hurricane-exposed state in the country. Carriers are using increasingly sophisticated catastrophe models that factor in sea-level rise, intensifying storm patterns, and aging infrastructure. If you live in a coastal or flood-prone area, your private carrier options may be limited, and the ones available may carry higher hurricane deductibles than what Citizens offers.
Assessment Risk Favors the Private Market. Here is something many homeowners overlook: if Citizens does not have enough money to pay claims after a catastrophic hurricane season, it can levy a special assessment on its policyholders — potentially up to 45% of your premium. Private-market policyholders face a much smaller assessment exposure. This alone can tip the math in favor of accepting a private carrier, even if the premium is slightly higher.
How to Make Your Decision: A Step-by-Step Guide
Once you have your depopulation packet open and your carrier vetted, here is the decision process:
Step 1: Compare the premiums. Find the Citizens estimated renewal premium and the private carrier's offer on the coverage comparison worksheet in your packet. Calculate whether the offer is within 20%.
Step 2: Compare the coverage — not just the price. Private carriers often include coverages that Citizens does not, such as water backup, equipment breakdown, or identity theft protection. They may also offer lower hurricane deductibles or broader liability limits. Look at the full picture, not just the bottom-line premium.
Step 3: Factor in the assessment risk. Remember that Citizens policyholders face potential assessments of up to 45% of premium after a catastrophic storm. A private carrier with a strong Demotech rating and adequate reinsurance eliminates most of that risk.
Step 4: Talk to an independent agent. A captive agent works for one company. An independent agent — like Atesa Risk Advisors — works for you. We can compare the takeout offer against quotes from 40+ A-rated carriers to make sure you are not leaving money or coverage on the table.
Questions to ask your insurance agent:
- "Is this takeout carrier financially stable, and what is their Demotech rating?"
- "What coverages does the private policy include that Citizens does not — and vice versa?"
- "Can you shop this against other carriers to see if there is a better option than the takeout offer?"
How Atesa Risk Advisors Can Help
Receiving a depopulation letter can feel overwhelming, but it does not have to be. As an independent insurance agency with access to 40+ A-rated carriers, we do exactly what the state intended when it created the depopulation program — we help you find the best private-market coverage for your home at a competitive price.
We are a RamseyTrusted Pro agency, which means we have been vetted for integrity, service quality, and putting clients first. Our founder, Ricardo Alonso, started his career in construction and development, so we understand Florida properties from the ground up — literally. We will review your depopulation packet, vet the takeout carrier, compare it against the broader market, and walk you through the decision in plain language.
Got a depopulation letter sitting on your kitchen counter? Call us at (904) 900-5063 [blocked] or request a free quote online. We will shop 40+ carriers to find you the best coverage at the best price — and make sure you do not miss your response deadline.
Frequently Asked Questions
Q: What happens if I ignore the Citizens depopulation letter?
A: If you do not respond by the deadline on your Offer Form, you will be automatically transferred to the private carrier that selected your policy. You will not lose coverage, but you will lose your ability to opt out (if the offer was above the 20% threshold) or to negotiate terms. Always open and respond to the letter.
Q: Can I go back to Citizens after being moved to a private carrier?
A: Yes, but only if you can demonstrate that comparable private-market coverage is either unavailable or costs more than 20% above what Citizens would charge. You would need to work with your agent to obtain quotes or declinations from private carriers to prove eligibility. It is not automatic.
Q: How do I calculate whether the offer is within 20% of my Citizens premium?
A: Find your estimated Citizens renewal premium on the coverage comparison worksheet in your packet. Multiply it by 1.20. If the private carrier's offer is at or below that number, the move is mandatory. For example: $2,500 Citizens premium x 1.20 = $3,000 threshold. Any offer at $3,000 or below means you must leave Citizens.
Q: What is a reciprocal exchange, and should I be worried about one taking over my policy?
A: A reciprocal exchange is a type of insurer where policyholders share risk with each other through a common pool, managed by an "attorney-in-fact." It is a legitimate insurance structure used nationwide. The key is to check the exchange's Demotech rating and surplus levels, just as you would with any traditional carrier. A strong rating means adequate financial backing.
Q: Does the depopulation program apply to condo and commercial policies too?
A: Yes. Citizens runs separate depopulation programs for personal lines and commercial lines, including condo association master policies. The process and the 20% rule work the same way. If you are a condo board member or commercial property owner, review your packet carefully and consult with your agent about the specific coverage differences.
Q: Will my coverage change when I move to a private carrier?
A: It can, and this is exactly why you need to compare the full coverage worksheets — not just the premium. Private carriers may offer broader coverage (water backup, equipment breakdown) but may also have different hurricane deductibles, different exclusions, or different claims-handling processes. An independent agent can do a side-by-side comparison for you.
Ricardo Alonso is the Founder of Atesa Risk Advisors, a Jacksonville-based independent insurance agency. Licensed 2-20 General Lines Agent and 2-15 Health & Life Agent with a Master of Liberal Arts in Finance from Harvard University. Ricardo's background in construction and development gives him a unique understanding of Florida property risks and the coverage homeowners need to protect their investment.
Ricardo Alonso
Founder, Atesa Risk Advisors
Ricardo is a RamseyTrusted insurance advisor with a Harvard ALM in Finance. He founded Atesa Risk Advisors to bring honest, independent insurance guidance to Florida businesses and individuals.