Florida’s insurance market, which has been battered by active hurricane seasons, excessive litigation and spiraling rates, is undergoing a turnaround, the governor said last week as he touted premium decreases and more insurers moving into the state.
Surveys continue to show that Floridians pay the highest property insurance premiums in the nation, but Gov. Ron DeSantis said on Feb. 5 that in 2024, the Sunshine State posted the lowest average property insurance rate increases in the country. In addition, 11 new insurance carriers have entered the state’s insurance market, bolstering competition, he said.
“... Citizens Property Insurance will be instituting homeowners’ insurance premium decreases for three-quarters of Miami-Dade and statewide decreases averaging 5.6%,” DeSantis said. “I also was pleased to announce significant reductions in auto insurance rates in Florida for companies like Geico (10.5% decrease), State Farm (6% decrease) and Progressive (8.1% decrease).”
Unchecked litigation was among the factors that drove up the costs of Florida home insurance premiums in the past year, according to the governor. But since 2019, the Legislature has passed key reforms that have curbed excessive lawsuits tied to the assignment of insurance benefits to third parties, eliminated one-way attorney fees in insurance claims, expanded state programs to encourage homeowners to “harden” their homes against storm damage, clarified what constitutes “bad faith” in insurance disputes and provided reinsurance assistance.
Citizens Property Insurance, the state-run insurer of last resort, is now shrinking its portfolio, meaning a greater proportion of Florida property owners are turning to private insurers, according to the governor.
“Since 2022, more than 477,000 policies have returned to the private market – up from just 16,408 in 2022 – signaling increased competition and better options for consumers,” the Governor’s Office reported.
Dr. Charles Nyce, a professor of risk management and insurance at the Florida State University College of Business, agreed that the property insurance market in the state is demonstrating that new state laws and legal reforms are beginning to pay off.
“We see new companies forming and companies that have been here expanding their coverage,” Nyce told the Florida Record in an email. “The market is getting better, but it will still take time before I would argue that it is a well-functioning, competitive market. We were lucky in 2024 that neither (Hurricane) Helene nor Milton were as bad as they could have been from a property insurance perspective.”
Both of those storms did significant damage in the state, but a lot of the damage was the result of flooding, something that is not covered in most home insurance policies, he said.
“This was devastating to Floridians who suffered the damage, especially those without flood insurance, but the wind damage, which is covered by private property insurance, was not enough to cause significant issues in the property insurance market,” Nyce said.
The Florida Chamber of Commerce reported this month that while Florida recorded an average property insurance rate increase of only 1% last year, other states, including Minnesota, Montana and Nebraska, saw their rates go up by more than 20%.
In addition, since January of last year, 17 insurers doing business in Florida have filed for property insurance rate decreases, and 34 others have not sought rate increases, according to the chamber.