A few years ago, Florida’s insurance market was teetering on the brink of collapse. Homeowners grappled with soaring premiums, insurers were either declaring bankruptcy or fleeing the state, and Citizens, the state-backed insurer of last resort, was rapidly expanding at an unsustainable pace.
What was the root cause of this crisis? It wasn’t just hurricanes or bad luck, but rather a flawed legal system that fueled fraud and spawned endless lawsuits, threatening the very foundation of homeownership and the broader economy.
Then, in a rare display of bipartisan cooperation, Florida lawmakers took decisive action. Between 2019 and 2022, they implemented comprehensive reforms aimed at stabilizing the market. They addressed issues within the trial bar, curtailed predatory lawsuits, and eliminated one-way attorney fees that had turned Florida into a hotbed of litigation.
The outcome? The insurance market began to recover.
Now, however, there are calls to roll back these crucial reforms. Such a move would be a grave mistake. If Florida needs a cautionary tale, it should look no further than California.
For years, California has buried its insurance market under layers of regulation that make it nearly impossible for insurers to operate sustainably. The state prevents insurers from using predictive risk modeling, which forces them to base rates on outdated historical data rather than accounting for the increasing risks of wildfires. Also, the rate approval process can take years, forcing companies to either write policies at a loss or exit the market. Many insurers have chosen the latter.
The consequences? Insurers are abandoning California, leaving homeowners with fewer choices and higher premiums. Hundreds of thousands of policyholders have been compelled to turn to the California FAIR Plan, the state-run insurer of last resort, which was never designed to handle this level of demand. As the private market shrinks, the burden on the FAIR Plan grows, driving costs even higher.
California’s challenges are not solely due to regulation. The state confronts rising wildfire threats and escalating rebuilding costs, both of which make home insurance more expensive. Yet, instead of adapting, California has doubled down on outdated policies that only exacerbate the difficulties insurers face. This explains why well-established insurers such as State Farm and Allstate have stopped writing new policies in the state.
This isn’t consumer protection; it’s a slow-motion collapse of the state’s insurance system, driven by misguided policies that ignore economic realities.
Florida, by contrast, has been working to correct its insurance crisis for years. In 2022, only 16,000 policies moved out of Citizens and back into the private market. By 2024, that number had skyrocketed to 477,000—a nearly 3,000% increase. Simultaneously, insurance lawsuit filings have plummeted by almost 70%, reducing one of the biggest cost drivers of higher premiums.
These positive changes didn’t come easily. They required political courage to stand up to entrenched interests that profited from the old system. But now, those same interests are seeking to undo these policies, claiming they went too far. If they succeed, Florida will find itself right back where it started.
Another crucial piece of the puzzle that is often overlooked is reinsurance. Florida insurers depend on reinsurance—essentially, insurance for insurance companies—to spread the risk of major storms. Most of this reinsurance comes from global markets, where investors constantly assess risk. These companies are not charities; they will increase rates if they perceive Florida’s legal and regulatory environment as becoming unstable again.
Since Florida’s reforms, reinsurers have responded positively, providing more affordable coverage to primary insurers. However, if policymakers reverse course, it would send a clear signal to reinsurers that Florida is reverting to its old ways, giving them a reason to raise rates. These costs would then be passed directly to homeowners.
Florida faces a clear choice: either adhere to the policies that are stabilizing the market or follow California’s path into crisis. The state must avoid overregulation that drives insurers out and forces homeowners into state-backed coverage. A thriving market needs competition, stability, and predictability, not artificial price controls that distort incentives.
Florida’s lawmakers took bold action to address the insurance crisis. Now, they must possess the discipline to stay the course. The reforms are working. The system is stabilizing. The momentum is real. The worst thing Florida could do now is undo the progress that has been made.
Jeff Brandes is a former Florida State Senator and the founder and president of the Florida Policy Project.
