Florida’s property insurance coverage market is an instance of the highly effective affect that sturdy legislative reforms can have in addressing a disaster. Different states, like Georgia, have seen the advantages of Florida’s authorized system abuse reforms and are following go well with with their very own reform packages to enhance their state’s authorized local weather and deal with rising insurance coverage prices.
Since Florida’s governor and Legislature handed historic authorized system abuse reforms two years in the past, charges are stabilizing and extra corporations are coming into {the marketplace} to supply protection. In accordance with a not too long ago commissioned statewide survey by APCIA,three out of 4 Floridians (77%) agree, when knowledgeable on the problem, that Florida lawmakers made the precise choice to restrict extreme authorized system abuse and frivolous lawsuits to assist stabilize the state’s property insurance coverage market.
The Florida insurance coverage commissioner not too long ago introduced that one other insurer is coming into {the marketplace} to supply protection, bringing the entire variety of new corporations coming into the market post-reforms to 12.
We proceed to see optimistic developments in owners insurance coverage charges in Florida. In accordance with S&P International, Florida had the bottom common statewide owners charge enhance within the nation in 2024 at simply 1 %. The Florida Workplace of Insurance coverage Regulation (OIR) stories that the 30-day common request for owners’ charges is 0.8%, in comparison with 21.8% two years in the past. Since January 2024, 19 corporations have filed for a charge lower and 37 corporations have requested no change or 0% enhance.
And but, lawmakers in Tallahassee are contemplating a number of proposals that will undo the progress that has been made.
There’s additionally excellent news within the auto insurance coverage market as a number of main auto insurers filed for current charge reductions between 10% and 6%. Moreover, litigation associated to auto glass repairs, which was a giant price driver within the auto insurance coverage market, has seen a dramatic decline, dropping from 24,720 lawsuits within the second quarter of 2023 to simply 2,613 in the identical interval of 2024.
Whereas some owners should still expertise charge will increase because the market continues to take care of elevated prices to restore and exchange property, together with the excessive danger of harm from hurricanes, total, the indicators are optimistic – and most Floridians agree. In accordance with APCIA’s survey, two out of three Floridians (67%) agree, when knowledgeable on the problem, that Florida’s property insurance coverage market is displaying indicators of enchancment following the reforms applied by the Florida Legislature.
And but, lawmakers in Tallahassee are contemplating several proposals that will undo the progress that has been made. A number of payments within the Florida Home would open new avenues for litigation and reinstate one-way lawyer charges. These payments are being superior amid sensationalized and deceptive media reporting on trade profitability and claims-handling considerations.
The actual fact is that this: Florida insurers skilled nearly eight straight years of unprofitability by way of 2023 on account of rampant authorized system abuse, which was pushed largely by abuses of Florida’s one-way lawyer payment statute.
The Florida Workplace of Insurance coverage Regulation has additionally carried out an intense assessment of claims closed with out cost following current storms. OIR expanded the required reporting for insurers to indicate all the explanation why a declare could also be closed with out cost. In accordance with OIR, their enhanced information reporting doesn’t assist allegations of insurance coverage corporations refusing to pay legitimate claims. OIR discovered that the highest causes for claims closed with out cost are: The declare injury was under the insurance coverage coverage’s deductible; or the declare was denied on account of flood injury that isn’t coated by the insurance coverage coverage.
Insurance coverage is without doubt one of the most extremely regulated industries, and insurers assist the vital function of the state regulator in monitoring solvency and market conduct and guaranteeing customers are protected in the course of the claims course of.
Insurers are deeply dedicated to fulfilling their guarantees to policyholders when catastrophe strikes. In accordance with APCIA’s survey, of these Floridians who filed a house or auto insurance coverage declare within the final two years, three out of 4 claimants are glad with the end result of their insurance coverage declare (75% of house owners insurance coverage claimants and 77% of auto insurance coverage claimants). Moreover, three out of 4 claimants (75%)imagine their insurance coverage firm handled them pretty relating to their insurance coverage declare.
As the controversy continues in Tallahassee within the closing weeks of session, the information ought to converse for themselves. Florida’s authorized reforms are working, and the property insurance coverage market is enhancing as charges stabilize and extra corporations enter {the marketplace}. If lawmakers maintain the road on payments that undo progress, customers will see the advantages as market circumstances proceed to enhance.
Adam Shores is senior vice chairman of state authorities relations for APCIA, the American Property Casualty Insurance coverage Affiliation.
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