TALLAHASSEE - Citizens Property Insurance Corp. will reduce premiums on its 1.2 million customers - on average, 14.5 percent for high-risk policy holders and 6.7 percent for others.

Most Hillsborough County homeowners who are outside the highest risk areas will see reductions of about 4.5 percent.

"We are working very hard to provide rate relief to our policyholders as soon as possible," said Paul Palumbo, senior vice president of underwriting.

Citizens' announcement of rate reductions comes a day after private insurers filed their proposals for cutting homeowners insurance rates.

The top five private companies in the Tampa Bay area proposed statewide average decreases of 3.1 percent to 14.2 percent. At the same time, some also have announced thousands of cancellations.

Legislators hope rate reductions by private insurers will prevent homeowners with canceled policies from flocking to Citizens, considered the insurer of last resort. Citizens has grown into the state's largest property insurer as private insurers canceled policies.

Reductions by Citizens and private companies come as a result of special legislation passed in January by the Florida Legislature and Gov. Charlie Crist in answer to outcries from property owners over rate increases and policy cancellations.

Under January's legislation, Citizens was given greater access to the Florida Hurricane Catastrophe Fund, which essentially provides backup insurance to companies.

State-backed Citizens, as well as private insurers, now can tap into the fund when losses from a hurricane reach a certain level. That level was reduced in the legislation.

If a big storm hits the state and Citizens has to use the fund to pay claims, however, homeowners across the state would get hit with a special assessment to make up the loss.

Citizens policyholders got another break in January's legislation - cancellation of a 25 percent rate increase that took effect Jan. 1 and a 56 percent increase scheduled for this month.

Citizens is in a period of transition. The new legislation allowed it to compete directly with private insurers for the first time. Officials hope that will allow Citizens to reduce rates over time because it won't be stuck with only high-risk coastal properties.

The lower rates will be available April 15 and will apply to policies effective Jan. 1 or later. Policyholders who paid for coverage since Jan. 1 will receive refund checks, which will be mailed starting about April 15, Palumbo said.

The rate reductions announced Friday will apply only to policies that include coverage for wind damage.

Reporter Kevin Begos can be reached at (850) 222-8382 or kbegos@tampatrib.com.