Gov. DeSantis says Florida's state-backed insurance agency of last resort is ‘unfortunately undercapitalized’

Florida’s Governor continues to defend the state’s struggling property insurance market, though his words offer as much caution as reassurance.

Gov. Ron DeSantis remarked Friday in Cape Coral that Citizens Property Insurance, the state insurer of last resort, is “unfortunately undercapitalized.” However, he also noted that the company feels like it will be able to pay claims from this storm due to a relative lack of policies in Southwest Florida.

Citizens’ customer base has grown to more than a million customers as private insurers have failed or bailed on the state, but the Governor’s remarks suggest that such growth comes with limits.

DeSantis told a reporter that “we had questions early on even as the storm was hitting about the Citizens Property Insurance, which I think most of you know is unfortunately undercapitalized, and it’s something that if you had a major storm, could be in some problems.”

Luckily for those policyholders at risk from Citizens’ precarious position, “they don’t have quite as many policies in this part of the state as they do in some other parts of the state. So they feel like they are going to be able to pay the claims that are out.”

Citizens has expressed confidence that its losses will be around $3.8 billion, which it potentially could absorb without an extra assessment.

DeSantis stressed, as he has previously in the wake of Hurricane Ian, the “wind-water thing” (the difference between wind damage and flood damage). He noted that in many cases, people did not get flood insurance.

“My view is most of the damage has been flood damage,” DeSantis said, contending that some people buying property insurance were told “they don’t need flood insurance” and will be stuck with Federal Emergency Management Agency payouts in lieu of insurance settlements.

The economic toll of the storm is enormous for the insurance industry, with more than $5.2 billion in paid off claims already, according to the Office of Insurance Regulation. A little more than 12% of all claims have been resolved as of Friday morning.

The insurance issues during the stretch run of the campaign have been something that DeSantis’ political enemies have tried to weaponize.

Democrat Charlie Crist brought his case that DeSantis is the worst property insurance Governor in Florida history to the airwaves as part of a seven-figure ad buy earlier this month. The Crist allies at the Lincoln Project have a new digital spot targeting women in the Interstate 4 corridor with the message that DeSantis was too busy playing politics to fix insurance.

Property insurance in Florida continues to struggle amid the second straight year of annual industry losses exceeding $1 billion. The Legislature convened in May for a Special Session to fix issues, including establishing a $2 billion reinsurance fund, but that didn’t stop the bleeding.

Even before Hurricane Ian, the average homeowners policy was $4,231 in 2022, nearly triple the U.S. average of $1,544.

____

Renzo Downey of Florida Politics contributed to this report.

This article was first published at Florida Politics.