By Core 4 Insurance Team · Licensed Florida Insurance Agency · Miramar, FL
A takeout letter arrives and you assume you get to choose. Usually you don’t — an offer not more than 20% above your Citizens renewal makes you ineligible to stay. Here is how that rule works, what Citizens actually is, and the surcharge disclosure every Citizens applicant signs but almost nobody reads.
A letter shows up saying a private company is taking over your Citizens policy, and you're trying to work out whether that's good news, bad news, or something you even get a say in.
Short version: you probably don't get a say, and that's not necessarily a bad thing. Here's what Citizens actually is, how the rule that pushed you out works, and the part almost nobody explains — why "cheaper" and "safer" aren't the same question.
What is Citizens Property Insurance?
The short answer: Citizens Property Insurance Corporation is Florida's state-created, not-for-profit insurer of last resort. It exists to cover homes the private market won't, and by law it's meant to be a temporary landing spot rather than a permanent competitor.
That last part shapes everything else. Because Citizens isn't supposed to be a normal insurance company competing for business, Florida law requires it to actively hand policies back to private carriers whenever it can. That program is called depopulation, or a "takeout."
It's been working. Citizens has shrunk dramatically:
| Measure | Figure |
|---|---|
| Policies moved to private carriers in 2025 | More than 546,000 |
| Citizens policy count | Under 400,000 — the lowest in over 20 years |
| New insurers entering Florida since the reforms | 17 |
| Carriers approved for 2026 depopulation cycles | 9 |
Figures as reported through early 2026. Depopulation is ongoing, so counts move — we re-verify this guide quarterly.
Which is why so many Florida homeowners are getting letters right now. If you got one, you're part of a very large group.
What is the 20% rule?
The short answer: If a private insurer offers you coverage at a premium that is not more than 20% above what Citizens would charge you at renewal, you are no longer eligible to stay with Citizens. You have to take the private policy.
This rule confuses people constantly, partly because it's written awkwardly in places — including on Citizens' own website. So here it is as plainly as we can put it.
| Private offer compared to your Citizens renewal | What happens |
|---|---|
| Cheaper than Citizens | You're ineligible for Citizens. Take the private policy. |
| Up to 20% more expensive | Still ineligible. You have to take it. |
| More than 20% more expensive | You may stay with Citizens — but you must respond to the notice. |
So an offer that's 19% higher than your Citizens premium still pushes you out. A lot of homeowners read "20% rule" and assume it means they only have to move if the private policy is cheaper. It doesn't.
How often does this actually bind? Over ten months of 2025, twelve private insurers took out 416,233 Citizens policies. All but 14,732 came in below the threshold — meaning roughly 96.5% of those homeowners were barred by state law from staying, regardless of preference.
Which leads to the reframe that matters most if a letter just arrived.
Is Citizens cheaper than private insurance?
The short answer: Often on the sticker price, yes. But Citizens carries a financial risk that private policies don't, and it's disclosed in the form every Citizens applicant signs.
This is the part we wish more homeowners knew before they decide they'd rather stay.
Florida law requires Citizens applicants to sign an acknowledgment. Two lines in it deserve your attention:
2. Citizens is not guaranteed by the state. The same form says, in capital letters, that Citizens Property Insurance Corporation is not supported by the full faith and credit of the State of Florida.
That second one surprises almost everyone. "State-backed" sounds like a government guarantee. It isn't. Citizens is a government entity, but if a catastrophic season exhausts its funds, the way it makes up the shortfall is by levying surcharges and assessments — and Citizens policyholders are first in line.
So the honest comparison isn't premium versus premium. It's:
Citizens
Available when nobody else will write you. But you carry surcharge and assessment exposure, and coverage options are generally narrower than the private market. If an older home is what pushed you to Citizens, a 4-point inspection is often part of the story.
Private carrier
Premium may be somewhat higher, but you're outside the surcharge mechanism. Broader coverage options, and financial strength varies by company — worth checking.
None of which means Citizens is a bad choice. For plenty of Florida homes it's the only choice, and it does its job. It means the decision has more than one number in it.
One more thing worth knowing: to be eligible for Citizens at all, you're required to try the private market first. It isn't a menu option you pick because you prefer it.
What changed with Citizens rates in 2026?
The short answer: Citizens cut rates. The 2026 filing was approved at an average 8.8% reduction on multiperil policies effective July 1, 2026, with wind-only down 5.5%.
Three out of five Citizens personal-lines policyholders are seeing an average reduction of about 11.5% — roughly $359 each.
Good news on its own, but it has a second-order effect most coverage misses entirely:
This is genuinely new as of July 1, 2026, and the practical effects will show up over the next few renewal cycles.
What should I do when a takeout letter arrives?
The short answer: Don't ignore it. These letters carry a real deadline — typically around 30 days — and doing nothing can result in an automatic transfer.
A straightforward order of operations:
Step five is where most people leave money on the table. Being taken out of Citizens is a forced moment of change — and the only free moment you get to reprice your whole policy. Because Core 4 is independent, we can run your home against 120+ carriers and tell you whether the takeout offer is genuinely competitive or just the one that happened to arrive.
Can I go back to Citizens later?
The short answer: Sometimes. If no private carrier will renew you within 20% of what Citizens would charge, you may become eligible again.
Eligibility isn't permanent in either direction. It's recalculated against the numbers in front of you at the time. Homeowners taken out a year or two ago whose private premiums have since climbed — while Citizens rates just fell — are exactly the group most likely to qualify again now.
We'd flag two things, though. Going back isn't automatic; someone has to check and apply. And "eligible for Citizens" isn't the same as "better off with Citizens" — the surcharge and assessment exposure comes back with it.
Our bilingual team runs this check for Florida homeowners in English or Spanish, whether or not you're a Core 4 client. If you've got a renewal that jumped, it's worth ten minutes.
The bottom line on Citizens vs private insurance
Citizens is Florida's insurer of last resort, not a competitor — and Florida law is actively pushing policies out of it. Over 546,000 moved in 2025 alone, and Citizens is now under 400,000 policies for the first time in two decades.
If you've received a takeout letter, the decision has probably already been made for you. An offer not more than 20% above your Citizens renewal makes you ineligible to stay, and roughly 96.5% of 2025's takeouts landed inside that line. The useful question isn't whether to leave. It's which carrier you land with.
And if you're weighing whether you'd rather stay with Citizens: the sticker price often is lower, but Citizens policyholders sign an acknowledgment that they can be surcharged as much as 15% of premium and that Citizens is not backed by the full faith and credit of Florida. That's a real difference, not a technicality.
Core 4 has served more than 14,000 Florida clients since 2014 and compares 120+ carriers on every quote. Bring us the letter — we'll tell you whether that offer is any good and what else is out there. Call (954) 420-1501 or come by 3488 Red Road in Miramar. Walk-ins welcome, English or Spanish.
About this guide
Who wrote it. Written and reviewed by the Core 4 Insurance team — licensed Florida insurance producers based in Miramar, Broward County. Core 4 is an independent agency, so we can price a takeout offer against the rest of the Florida market rather than treating it as the only option.
Where we work. Statewide across Florida, with our office and deepest local experience in Broward, Miami-Dade and Palm Beach counties.
How we source it. Statutory and program claims trace to the Florida Statutes, Chapter 627 and the Florida Office of Insurance Regulation. Repair cost ranges are general industry figures for planning, not quotes. Figures are dated inline and reviewed quarterly.
Regulator. Core 4 Insurance is licensed by the Florida Office of Insurance Regulation.
Last reviewed by the Core 4 Insurance Team on July 24, 2026. Citizens eligibility rules, rates and depopulation activity change frequently — the 2026 rate reduction took effect July 1 — so we re-verify this guide quarterly. For the broader picture, see our flagship Florida Homeowner’s Insurance Guide.