Florida’s legislative reforms to deal with declare fraud and authorized system abuse are stabilizing the state’s property/casualty insurance coverage market, in response to the newest Triple-I Issues Brief.
Claims-related litigation has considerably declined over the previous two years, and premium averages are practically flat, with a number of insurers requesting charge decreases from the state’s insurance coverage regulator. As well as, the temporary says, the variety of insurers writing enterprise within the state has rebounded after a multi-year exodus. This competitors from the personal market has allowed policyholders to depart Residents Property Insurance coverage Corp. – the state-run insurer of final resort – to acquire protection at beforehand unavailable charges from a a lot more healthy personal market.
In keeping with the state’s Workplace of Insurance coverage Regulation (OIR), Florida in 2022 accounted for practically 71 p.c of the nation’s owners claim-related litigation, regardless of representing solely 15 p.c of householders insurance coverage claims. The identical yr – earlier than Hurricane Ian made landfall in Florida – six insurers within the state declared insolvency, primarily on account of financial pressures from authorized system abuse. Based mostly on insured losses, Ian grew to become the second-most expensive U.S. hurricane on document, due largely to extraordinary litigation prices for disputed claims.
The Legislature responded to the rising disaster by passing a number of items of insurance coverage reform that, amongst different issues, eradicated one-way lawyer charges and project of advantages (AOB) for property insurance coverage claims and prohibited deceptive authorized service adverts and the misuse of client well being data for authorized companies.
Premium charge development slowing
The affect of the 2022 and 2023 reforms might be seen in premium charge modifications, notably with respect to owners insurance coverage. Householders charges in Florida grew at a a lot slower charge in 2024, whilst charge development remained sturdy nationally. Progress in private auto insurance coverage premium charges in Florida has slowed for the reason that repeal of AOB and one-way lawyer charges, however the development is also according to nationwide expertise.
“There are a number of elements concerned in insurance coverage charges, and Florida’s property and auto markets are difficult,” Florida Governor Ron DeSantis stated in February, “however…information means that, in 2024, Florida had the bottom common owners’ premium will increase within the nation, and the general market has stabilized, with 11 new firms having entered the market over the previous two years.”
Among the many high 10 nationwide insurers writing owners insurance coverage in Florida, 60 p.c have expanded their enterprise over the previous yr, and 40 p.c of all insurers working within the state filed for charge decreases in 2024, in response to Florida Insurance coverage Commissioner Michael Yaworksy.
The price of reinsurance additionally continues to lower for Florida carriers.
“In 2024, most firms paid much less for reinsurance than they did in 2023,” in response to the OIR web site. “The common risk-adjusted price for 2024 was -0.7 p.c, a big discount from final yr’s change of 27 p.c enhance from the prior yr.”
Reinsurance prices are factored into premium charges, so that is one more reason Florida now has the bottom common charge filings in the USA in 2024, in response to S&P International Market.
Study Extra:
Florida’s Progress in Legal Reform: A Model for 2025
How Georgia Might Learn From Florida Reforms
Resilience Investments Paid Off in Florida During Hurricane Milton
Florida Homeowners Premium Growth Slows as Reforms Take Hold, Inflation Cools
