Florida Insurance Market Strengthens as Legal Reforms Curb Costs

Florida’s recent legislative efforts to combat insurance fraud and legal system abuse are yielding positive results, as highlighted in the latest Triple-I Issues Brief. The state’s property and casualty insurance market is showing signs of stabilization, with claims-related litigation significantly decreasing over the past two years. This decline has contributed to a slowdown in premium increases, and some insurers have even requested rate reductions. Additionally, more private insurers are re-entering the market, allowing policyholders to shift away from Citizens Property Insurance Corp., Florida’s state-run insurer of last resort.

Prior to these reforms, Florida accounted for 71% of the nation’s homeowners insurance litigation despite only representing 15% of claims. This legal climate led to multiple insurer insolvencies, worsened by costly litigation following Hurricane Ian. In response, the Florida Legislature passed laws eliminating one-way attorney fees and assignment of benefits (AOB) while also restricting misleading legal ads and limiting excessive claims costs. A 2024 Florida Supreme Court ruling further reinforced these measures by limiting discovery scope in lawsuits.

The impact of these reforms is evident in premium rate trends. In 2024, Florida saw the slowest average homeowners insurance rate increases in the country, with 40% of insurers filing for rate decreases. The cost of reinsurance, a key factor in premium pricing, also dropped for most insurers. However, some lawmakers are now pushing to reverse parts of these reforms, raising concerns about the long-term stability of Florida’s insurance market.