Florida’s legislative reforms to handle declare fraud and authorized system abuse are stabilizing the state’s property/casualty insurance coverage market, based on the newest Triple-I Points Transient.
Claims-related litigation has considerably declined over the previous two years, and premium averages are practically 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 non-public 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 non-public market.
Based on 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 house owners insurance coverage claims. The identical yr – earlier than Hurricane Ian made landfall in Florida – six insurers within the state declared insolvency, primarily as a consequence of financial pressures from authorized system abuse. Primarily based on insured losses, Ian turned the second-most pricey 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 legal professional charges and project of advantages (AOB) for property insurance coverage claims and prohibited deceptive authorized service adverts and the misuse of client well being info for authorized providers.
Premium fee progress slowing
The impression of the 2022 and 2023 reforms could be seen in premium fee modifications, notably with respect to owners insurance coverage. Owners charges in Florida grew at a a lot slower fee in 2024, at the same time as fee progress remained sturdy nationally. Development in private auto insurance coverage premium charges in Florida has slowed for the reason that repeal of AOB and one-way legal professional charges, however the pattern is also in line with 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 corporations 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 fee decreases in 2024, based on 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,” based on 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 improve from the prior yr.”
Reinsurance prices are factored into premium charges, so that is another excuse Florida now has the bottom common fee filings in the US in 2024, based on S&P World Market.
Study Extra:
Florida’s Progress in Authorized Reform: A Mannequin for 2025
How Georgia May Study From Florida Reforms
Resilience Investments Paid Off in Florida Throughout Hurricane Milton
Florida Owners Premium Development Slows as Reforms Take Maintain, Inflation Cools
