Somewhere in Florida this week, a homeowner is going to pull a thick envelope out of the mailbox, see the name of an insurance company they have never heard of on the front, and set it on the counter with the pizza coupons. A week later it is buried under a grocery list. A month later, their homeowners policy belongs to that company, and they never read a word of it.
That envelope is called a takeout letter, and if your homeowners policy sits with Citizens Property Insurance Corporation, one of these letters is likely coming for you sooner or later. It deserves more than the junk mail treatment, because what it says, and what happens if you ignore it, is written into Florida law.
Why the letters keep coming
Citizens is the insurer the State of Florida created as a last resort, for homeowners who cannot find private coverage. When the private market contracts, Citizens swells. When the private market recovers, the state pushes those policies back out to private companies through a process called depopulation, governed by section 627.351 of the Florida Statutes. A takeout is one private carrier agreeing to take over, or assume, a block of Citizens policies. Your policy can be one of them.
Citizens reported 266,231 policies in force as of August 31, 2026, a fraction of its peak, and the takeout rounds keep running, with the next assumption date set for November 18, 2026. The system is working exactly the way the statute designed it to work. The only question is whether the homeowner reads the letter before the deadline inside it passes.
The first 20 percent rule decides whether you can stay
Here is the part most people miss. Staying with Citizens is not simply your choice. Under the eligibility framework in place since the 2022 reforms, if a private insurance company offers you comparable coverage at a premium that is no more than 20 percent higher than what Citizens charges you, you are generally not eligible to keep or renew a Citizens policy instead. Read that again. If the private offer lands within that 20 percent window, the state company is off the table, whether you like the private company or not.
The word that does the heavy lifting in that sentence is comparable. Comparable means the coverage has to line up: similar dwelling limits, similar deductibles, similar treatment of water damage and roof claims. A cheap quote with stripped down coverage is not automatically comparable, and a real comparison happens on the declarations pages, not on the first page of a sales letter. Every offer has to be measured against the policy it would replace.
The second 20 percent rule softens the first renewal
The second rule is the one that protects you after a takeout happens. For the first renewal after a private carrier assumes your policy, the renewal price is measured against what Citizens would have charged, inside that same 20 percent frame. In plain terms, a company cannot take over your policy through a takeout and then immediately hit you with an unlimited increase at the first renewal. There is a ceiling for that first cycle.
Understand what that ceiling is and what it is not. It is breathing room. It is not a permanent cap, and it is not a promise about year two or year three, when ordinary market pricing takes over. Homeowners who treat the first takeout premium as the price they will pay forever are setting themselves up for a rude renewal notice later.
Doing nothing is also a decision
Every takeout letter carries a deadline, and the deadline is the whole ballgame. If you want to decline the transfer where the law allows you to decline it, that choice has to be registered, usually through your insurance agent, before the date in the letter. Silence does not preserve the status quo. Silence moves the policy on the assumption date, and the new company’s name shows up on your mortgage company’s escrow records whether you read the letter or not.
So the first move with one of these letters is unglamorous. Open it the day it arrives. Find the deadline. Put the letter somewhere seperate from the junk mail, and calendar the date. That ten minutes is the difference between making a choice and having one made for you.
Compare the policy, not just the premium
If a takeout offer lands in front of you, compare it the way a claim would be compared after a storm, because that is when the differences stop being theoretical. Look at the Coverage A dwelling limit. Look at the hurricane deductible, and remember that in Florida that deductible is usually a percentage of the dwelling limit, so 5 percent on a $400,000 home is $20,000 out of your pocket before the carrier pays a dollar. Look at how the roof gets paid, replacement cost or a depreciated schedule based on the roof’s age. Look at the water damage limits buried in the endorsements. Two policies with premiums a hundred dollars apart can be products that behave completely differently on the worst week of your year.
None of this means every takeout is bad. Plenty of homeowners end up with a stronger private policy and are glad the letter came. It means the letter is a contract event, not a coupon. The state built this machinery to move policies back to the private market, and it moves them whether the mailbox gets opened or not. The homeowners who come out fine are the ones who read the thing.
About the Author
Louis P. Meyer, Esq. is a Senior Attorney at Kanner & Pintaluga, P.A. in Tampa, Florida, where his practice focuses on personal injury cases and first party property damage claims across Florida, including car, motorcycle, and truck accidents, and hurricane, wind, water, fire, and mold losses. He writes the LouisTheLawyer publication on Substack and hosts the podcast Off The Record by Louis Meyer. He practices from the firm’s Tampa and Boca Raton offices. This article is general information about how insurance claims work in Florida. It is not legal advice about any specific accident or policy.
Louis P. Meyer, Esq., Senior Attorney, Kanner & Pintaluga, P.A., 100 S. Ashley Drive, Suite 610, Tampa, FL 33602. Phone: 561-206-2949. Email: lmeyer@kpattorney.com.
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