Historic Reform Leads 8 Carriers to File Rate Decreases in Florida’s Insurance Market

As an insurance agent who has tirelessly advocated for reforms in Florida’s property insurance market for the last several years, and a homeowner in Florida myself, I am over the moon to see tangible progress and a brighter outlook. The recent updates from the Office of Insurance Regulation (OIR) reflect the positive impacts of the legislative reforms enacted in 2022 and 2023, primarily surrounding legal system abuse and tort reform. These changes have fortified consumer protections, strengthened the Citizens Property Insurance Corporation, and provided much-needed clarity and stability to the market.

Rate Stabilization and Decreases

For the first time in years, we are witnessing a trend toward rate stabilization. Rate filings for 2024 show a slight downward trend, with ten companies filing for a zero percent increase and at least eight companies filing for rate decreases! This development is a significant milestone, indicating that the market is finally stabilizing after years of volatility.

Reinsurance Market Response

The reinsurance market, a crucial component affecting consumer costs, has responded positively to these reforms. In short, when the reinsurance rates for the insurance companies are higher, those increases are passed along to the consumer.  The early indications from the 2024 reinsurance purchasing season are promising, suggesting further relief and stability for consumers. This shift is a clear sign that the reforms are working, providing a more predictable and secure environment for insurers.

Increase in Financial Strength

After years of consecutive underwriting losses in the Billions fo the industry, many insurers are reporting small net profits for 2023. This newfound financial stability is a testament to the effectiveness of the reforms. 

Legislative Leadership and Market Research

Florida’s legislative reforms have set a benchmark for other states, with Hawaii, Georgia, and Louisiana looking to emulate our success. Florida has been in this “Hard Market Cycle” in insurance for several years, and the rest of the country is now feeling that pain. 

The OIR’s ongoing market research, in collaboration with universities, continues to explore innovative ways to improve market outcomes and inform policy decisions.  My Safe Florida Home Program, for example, is Florida’s proactive approach to help homeowners improve their properties and save on insurance. $350 million has been appropriated to this program, with the latest round focusing on our older population on a fixed income.  This research is crucial in maintaining a dynamic and responsive insurance market.

Litigation Reforms

One of the primary challenges for Florida’s property insurance market has been the frequency and severity of litigated claims. In 2022, Florida had only 14.9% of the nation’s homeowners’ claims but had 70.8% of the nation’s litigation. The recent legislative reforms have successfully curbed abusive litigation practices, leading to a significant decrease in non-catastrophe claims and fostering a more rational claims environment. 

Strengthening Citizens Property Insurance Corporation

Citizens Property Insurance Corporation, the state program designed to be  “the insurer of last resort,” has started to see policy count decreasing for the first time in years. This is a positive indicator of the private insurance market’s strengthening, lowering the potential for assessments on Floridians.

Looking Ahead

The progress we are witnessing is the result of persistent advocacy and strategic legislative action. As an insurance agent, I am ecstatic to see these reforms bearing fruit, bringing stability and relief to Florida’s property insurance market. The light at the end of the tunnel is not just a glimmer of hope; it is a beacon of the positive change we have worked so hard to achieve.

DISCLAIMER: This article contains general insurance information. Please refer to your policy language for exact coverage details or contact one of our team members for more information.