The Florida homeowners insurance market is showing signs of stabilization after several years of rate increases and legislative changes aimed at curbing litigated and abusive claims, according to industry representatives and regulatory data.
Citizens Property Insurance Corp., the state-backed insurer, will reduce rates by an average of 5.6% statewide in 2025. State officials say 75% of Miami-Dade County homeowners, half in Broward, and 19% in Palm Beach County are expected to see lower rates.
The insurer’s policy count has dropped below 1 million, attributed to successful depopulation as more private insurers re-enter the market.
Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents, said distributors are seeing more insurers entering the market and expanding their willingness to write new business.
“Their appetite is expanding, and prices are coming down,” Ulrich said. Some agents have reported rate reductions for homeowners of 40% or more, adding, “It’s surprising how quickly rates have started to come down.”
Ulrich also noted new entrants are writing coverage more aggressively as they are not burdened by legacy exposure, particularly high costs from litigated claims prior to the 2022 reforms.
The market has also seen new insurers, including reciprocal insurance exchanges – member-owned entities that pool funds to pay claims and can generate dividends for members. Executives say reciprocals may offer more sustainable coverage in catastrophe-prone regions like Florida due to their capital structure and regulatory oversight.
Since those reforms, the Florida Office of Insurance Regulation (OIR) has approved 14 new residential insurance writers. Domestic property carriers reported a turnaround from a $751 million net loss in 2022 to a $944 million net income last year.
Industry observers continue to monitor the market for practices that previously led to instability.
Joshua Stephens, southeast regional vice president at the National Association of Mutual Insurance Companies, said, “Florida remains an important market to monitor as it gives us guidance in how meaningful litigation reforms can impact affordability and availability in a catastrophe prone state.”
He emphasized the importance of allowing reforms time to take effect, but noted there are already indications of improvement.
Chase Mitchell, assistant vice president of state government relations at the American Property Casualty Insurance Association, described Florida’s insurance reforms as historic and said they are having the intended impact.
He said, “Florida’s property insurance market has been pulled back from the brink of collapse and is now steadily improving,” and cautioned that reversing the reforms could undermine recent progress.
Legislative reforms have also led to a reduction in legal expenses for insurers. Florida’s defense and cost-containment expense (DCCE) ratio, a key measure of litigation impact, fell to 3.1 in 2023 from 8.4 in 2022. Direct incurred legal defense expenses dropped to $739 million in 2023, down from $1.6 billion the previous year, reflecting the impact of legislative changes.
Despite these developments, more approved homeowners multiperil rate increases than decreases have taken effect since the start of the year, with 25 increases and 15 decreases. The OIR reported that, since the start of last year, 27 companies have filed for a rate decrease and 41 have requested either no change or a 0% increase as of June 27.
Some rate hikes have targeted specific property types. Heritage Property & Casualty Insurance Co. received approval to raise mobile and manufactured home rates by 7.6% effective Oct. 1, while Citizens increased wind-only mobile and manufactured home rates by 19.7% on June 1.
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