The Takeout Letter Explained: Citizens Insurance and the 20 Percent Rule in 2026
- Charly
- 3 days ago
- 3 min read
A 2026 ready guide for Miami homeowners to understand the Citizens depopulation process, the 20 percent rule, and what to do next.
Why takeout letters are common in 2026
Citizens Property Insurance Corporation was designed as a last resort option when private coverage is not available. In recent years, Florida has pushed to move eligible policies back into the private market. That process is often called depopulation, and the notice you received is commonly called a takeout letter.
If you are insured with Citizens in Miami Dade, you may receive an offer from one or more private insurers to assume your policy. The key issue is whether you must accept the offer or whether you can stay with Citizens.
Depopulation explained
A private insurance company applies to assume policies from Citizens. If your policy is selected, you receive a packet with the offer details and instructions. You are usually given a short window to respond. If you do nothing, the policy may move automatically depending on the offer price and Citizens eligibility rules.
The 20 percent rule that decides if you can stay with Citizens
If at least one private offer is not more than 20 percent higher than your Citizens renewal premium, you become ineligible to remain with Citizens and the policy can be moved to the private market.
If the private offer is more than 20 percent higher than your Citizens renewal premium, you can usually opt out and stay with Citizens, but only if you respond correctly and on time.
Why leaving Citizens can still make sense
Stronger long term stability Citizens policy holders can face assessments after major catastrophic losses, depending on the situation and statewide outcomes.
Coverage differences Citizens policies can be more limited depending on the form and endorsements. Private carriers may offer broader options that better match your property and lifestyle.
Better alignment with your total insurance planA private policy may offer more flexibility on deductibles, optional coverages, and bundling strategies that can improve your overall value.
A 2026 update you must plan for: flood insurance requirements
Flood insurance requirements for many Citizens policies expand as the phased schedule continues. In 2026, many policies with higher insured values are expected to require flood coverage as a condition of keeping Citizens, and by 2027 most personal residential policies that include wind coverage are expected to require it.
Important Miami note Condominium unit owners and some policies without wind coverage may have different requirements, so it is critical to confirm how the rule applies to your specific policy type.
What to do the day you receive a takeout packet
Check the deadline in the packet and put it on your calendar
Compare the full coverage details, not just the premium
Confirm deductibles, exclusions, and key endorsements
Ask whether you are required to move under the 20 percent rule
If you can opt out and want to stay, submit the choice exactly as instructed
If you must move, shop additional quotes quickly so you are not limited to one option
FAQs
What is a Citizens takeout letter
It is a notice that a private insurance company is offering to assume your Citizens policy as part of Floridas depopulation process.
Do I have to accept the private offer in 2026
You may be required to accept if at least one offer is not more than 20 percent higher than your Citizens renewal premium. If all offers are more than 20 percent higher, you may be able to opt out.
What happens if I ignore the packet
In many cases, not responding can trigger an automatic move to the private insurer or can remove your ability to opt out. Always follow the instructions in the packet before the deadline.
Is the cheapest offer always the best option
Not necessarily. You should compare coverage limits, deductibles, exclusions, and endorsements because small differences can create large claim gaps.
Will flood insurance affect my total cost in 2026
It can. If flood coverage is required for your Citizens policy based on the phased schedule and your insured value, it may add to your annual insurance budget even if you are not in a high risk flood zone.
As 2026 approaches, the smartest move for Miami homeowners is to treat a takeout letter as a time sensitive decision, compare coverage carefully, and act early so you keep control of your renewal. If you want help reviewing your packet and your options, Seguralia can walk you through the rule, the numbers, and the coverage details.
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