Florida’s legislative reforms to handle declare fraud and authorized system abuse are stabilizing the state’s property/casualty insurance coverage market, in line with the most recent Triple-I Points Temporary.
Claims-related litigation has considerably declined over the previous two years, and premium averages are almost flat, with a number of insurers requesting fee 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 go away 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 almost 71 p.c of the nation’s householders claim-related litigation, regardless of representing solely 15 p.c of house owners insurance coverage claims. The identical yr – earlier than Hurricane Ian made landfall in Florida – six insurers within the state declared insolvency, primarily resulting from financial pressures from authorized system abuse. Based mostly on insured losses, Ian grew to become the second-most expensive U.S. hurricane on file, 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 legal professional charges and project of advantages (AOB) for property insurance coverage claims and prohibited deceptive authorized service advertisements and the misuse of shopper well being data for authorized providers.
Premium fee development slowing
The affect of the 2022 and 2023 reforms will be seen in premium fee modifications, significantly with respect to householders insurance coverage. Householders charges in Florida grew at a a lot slower fee in 2024, whilst fee development remained sturdy nationally. Development in private auto insurance coverage premium charges in Florida has slowed because the repeal of AOB and one-way legal professional charges, however the pattern is also per nationwide expertise.
“There are a variety of components 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 householders’ premium will increase within the nation, and the general market has stabilized, with 11 new corporations having entered the market over the previous two years.”
Among the many high 10 nationwide insurers writing householders 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 fee decreases in 2024, in line with Florida Insurance coverage Commissioner Michael Yaworksy.
The price of reinsurance additionally continues to lower for Florida carriers.
“In 2024, most corporations paid much less for reinsurance than they did in 2023,” in line with the OIR web site. “The typical 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 fee filings in the USA in 2024, in line with S&P World Market.
Be taught Extra:
Florida’s Progress in Authorized Reform: A Mannequin for 2025
How Georgia May Be taught From Florida Reforms
Resilience Investments Paid Off in Florida Throughout Hurricane Milton
Florida Householders Premium Development Slows as Reforms Take Maintain, Inflation Cools
