On Wednesday, the Florida Legislature passed three bills, one of which is aimed at stabilizing the property insurance market in Florida: Senate Bill 2A, legislation that is designed to improve the property insurance marketplace for homeowners. Over the last 18 months, Florida has witnessed multiple insurance carriers fail or decide to stop doing business in our state. There are a multitude of reasons why, but three major reasons include the increase in Florida property values, litigation costs, and the cost of reinsurance for insurance companies.
• Everyone knows that Florida is a popular place to be. Because of the current demand for housing, prices are up, which inevitably leads to increased insurance rates.
• In recent years, Florida has accounted for over 75% of insurance litigation in the nation. Florida sees around 100,000 of these lawsuits each year, compared to ~1,000 in every other state.
• Reinsurance costs (insurance for the insurance companies) rose 28% in 2021 and 52% in 2022.
These are three main drivers of rising property insurance costs, with the latter two having caused insurance companies in Florida to lose money to the tune of billions of dollars.
Here’s what we know. Consumers need relief from the jumps in property insurance prices. We also know there can be bad actors and some Floridians have seen their livelihoods hang in the balance because of those bad actors. However, insurance companies in Florida are held to a high standard and Floridians have the benefit of a robust Office of Insurance Regulation (OIR) and Department of Financial Services (DFS) to hold those companies accountable and assist Floridians if they fall victim to improper behavior.
If any progress is to be made, the property insurance market in Florida must be stabilized. This legislation will mitigate the price increases we have endured while enticing insurers to stay in Florida and attracting new insurers to the state. Florida can’t have a property insurance market if there are no companies willing to insure our property.
This is a statewide issue, with billions of dollars and millions of livelihoods at stake, and there is no single solution or silver bullet. As a Legislature, we are resolved that this is a good first step to address what is a multi-faceted problem and intend to revisit the issue in future Legislative Sessions. Please CLICK HERE to read the Senate’s full press release for detailed information on the changes that SB 2A will make, as well as Senate Bills 4A (Disaster Relief) and 6A (Toll Relief).