Insurance Reforms Stabilizing Florida Market
A Florida consumer group says recent reforms have reduced litigation, lowered Citizens’ policies and attracted new insurers, helping stabilize the market.
TALLAHASSEE, Fla. — A consumer advocacy group tied to the Florida Chamber says property insurance reforms have stabilized a market that some, not that long ago, worried was on the brink of collapse.
The Consumer Protection Coalition in a statement says legislative reforms approved two years ago are leading to steadying and declining premiums, as well as a drop in the number of policies held by Citizens Property Insurance Corp.
The reforms, which the state’s Office of Insurance Regulation (OIR) has been touting as well, include limiting how much attorneys can collect to cut down on lawsuits and working to expand the number of companies doing business in the state to create competition that will lower rates.
Despite the upbeat report, Florida’s homeowner insurance rates remain higher than the national average. According to a May report from Florida All Risk Insurance in St. Petersburg, the average annual premium in the state is $2,625, 24% higher than the national average of $2,110.
The Consumer Protection Coalition touts the number of new companies entering the state as one of the main contributors to the improving marketplace. According to the statement, and data from OIR, 14 new carriers have been approved to write residential homeowners’ insurance policies in Florida since 2023; two were approved last month.
When OIR announced the two latest companies, Insurance Commissioner Mike Yaworsky said the office has seen “over 120 residential filing requests for rate decreases or 0% increases so far this year.”
That’s a big change from December 2021, when Citizen’s reported rate hikes were necessary because the 52 private companies that were writing 79% of property insurance policies in the state lost $847 million through the third quarter of 2021.
This was largely blamed on the number of lawsuits against insurance companies filed in Florida. Consumer groups, insurance agents and government officials at the time regularly pointed to the fact that Florida accounted for 8% of policies nationwide in 2019, while accounting for 76% of all litigation.
According to the Florida Association of Insurance Agents, between 2013 and 2020, insurance carriers in Florida paid out $15 billion in claims costs. Of that, only 8% was paid to consumers. Attorneys got 71%. Some plaintiff attorneys have long questioned that data point and argued they work with homeowners who are simply trying to collect on claims they are legitimately owed.
The Consumer Protection Coalition says the litigation has dropped by nearly 30% since the reforms passed.
As for how this all is affecting Citizens, which was created as the insurer of last resort, it had 777,592 policies in force in June, down 36% from the previous year. That, the coalition says, is also 44.9% lower than when the number of policies peaked at 1.41 million policies in October 2023.
The coalition says the drop in the number of policies also helps bring down Citizens’ exposure. That fell from $520.1 billion last year to $295.1 billion, a 43% reduction.
Mark Wilson, president and CEO of the Florida Chamber, says in the coalition statement that by cutting red tape and tamping down litigation, state leaders “made an immeasurable impact benefitting all of Florida.”
The chamber says the Consumer Protection Coalition is made up of business leaders, consumer advocates, real estate agents, construction contractors, insurance agents and insurance trade groups.
The organization’s objective, it says, is to push “for reforms to protect consumers from unnecessary high costs and abuse due to the state’s treacherous litigation environment and advocating for sound public policy that puts consumers first.”
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