Florida’s Property Insurance Market on the Road to Recovery
Florida’s property insurance market is finally showing signs of healing after years of instability. Recent reforms implemented in 2022 are beginning to deliver tangible benefits to consumers through increased competition, rate decreases, and a healthier overall marketplace. As an insurance broker, I’ve witnessed firsthand the positive impact of these changes.
Financial Recovery of Insurance Companies
The financial results of Florida’s publicly traded insurance holding companies tell a clear story of recovery. After accumulating hundreds of millions in losses from 2018-2022, these companies are now showing signs of financial stability. For instance, Heritage Insurance reported a net income of $61.5 million in 2024, with an 8.02% profit margin. Similarly, Universal Insurance reported a net income of $58.9 million, although its profit margin remains below the optimal range at 4.23%. HCI Group has achieved a higher profit margin of 18.62%, indicating a stronger recovery.
Rate Decreases for Homeowners
My agency has observed significant rate decreases across Florida, contradicting the narrative that reforms aren’t benefiting consumers. Actual examples from our clients include:
- New Port Richey: 4.3% decrease in homeowners policy, from $5,198 to $4,974
- St. Petersburg: 45.9% decrease, from $4,654 to $2,520
- Largo: 28.7% decrease, from $20,566 to $14,660
- Condo unit policies in St. Petersburg and Sarasota also saw significant decreases, ranging from 25.2% to 52.9%
These decreases demonstrate that the 2022 reforms are working as intended, providing relief to Florida homeowners.
Potential Threats to Recovery
However, proposed legislation, Senate Bill 426 and House Bill 1551, poses a significant risk to this progress. These bills aim to reintroduce one-way attorney fees into property insurance litigation, a factor that contributed to the market collapse in 2022. The House staff analysis explicitly states that these bills would cause insurance rates to increase, harming consumers while benefiting law firms specializing in insurance litigation.
Economic Implications
The economic incentives behind these bills are transparent: litigation-friendly policies benefit attorneys financially, regardless of consumer impact. If passed, we can expect reinsurers to raise rates, private insurers to reduce their exposure in Florida, and Citizens Insurance to become overloaded again. These consequences would be borne by Florida homeowners through higher premiums, fewer options, and increased financial risk.
Conclusion
Florida’s insurance market is on the right track, with recent reforms delivering tangible benefits to consumers. As policymakers evaluate the proposed legislation, the primary consideration should be its impact on Florida homeowners who have weathered years of insurance challenges. Our state deserves a stable, competitive insurance market that serves the long-term interests of property owners across Florida.
