As the recent legislative session in Florida came to a close, Florida lawmakers failed to make significant progress in improving the state’s property insurance market. Despite expectations that they would build upon previous reforms and increase funding for initiatives like the My Safe Florida Home grant, the legislative session took an unexpected turn. The Florida House proposed reversing hard-won legal reforms that had stabilized the insurance market, a move that was met with opposition from many lawmakers and the governor. Fortunately, the Florida Senate blocked the bill, recognizing that it was too early to undo the reforms.
The Consequences of Artificially Low Premiums
Florida has a history of attempting to legislate away the high cost of hurricane exposure by artificially lowering insurance rates. From rate freezes to mandatory rollbacks, policymakers have treated high premiums as a political failure rather than a financial signal. However, risk doesn’t disappear simply because it’s legislated away; it merely goes underground, only to reemerge when disaster strikes. When insurers are restricted from charging actuarially sound rates, they leave the market, capital dries up, and the true cost is ultimately borne by the public after a disaster.
Mitigation: A Long-Term Solution
The National Institute of Building Sciences estimates that every dollar spent on mitigation saves between $6 and $7 in future disaster recovery costs. Programs like the My Safe Florida Home grant have proven effective in reducing risk among new and existing properties. By providing grants and inspections to help homeowners strengthen their properties, these programs have resulted in fewer claims, less damage, and quicker recoveries. While mitigation may not offer the same short-term political benefits as artificially cutting rates, it provides a long-term solution that will benefit all Floridians.
A Way Forward
Florida policymakers have made genuine efforts to stabilize the insurance market, but more work remains to be done. To improve the market, insurance pricing must be allowed to reflect exposure to risk, and mitigation grants should continue to be offered to strengthen homes. By taking a balanced approach that addresses the root causes of high premiums, Florida can create a more sustainable property insurance market that benefits all residents.
