Florida property insurance reforms have significantly affected costs and litigation across the state, with recent legislative changes shaping the market’s direction in 2025. The property insurance sector in Florida has experienced instability due to high premiums, insurer insolvencies, and extensive legal disputes, making these reforms a central focus for homeowners and industry stakeholders.

Florida Property Insurance Reforms and Market Instability

The Florida property insurance market has faced ongoing challenges related to rising premiums, frequent insurer failures, and a surge in lawsuits. According to the Florida Office of Insurance Regulation, much of the instability stemmed from legal practices such as assignment of benefits and one-way attorney fee structures, which encouraged litigation and increased costs for both insurers and policyholders.

In response, lawmakers enacted a series of reforms between 2019 and 2023, culminating in significant changes under SB 2-A in 2022. These measures targeted the root causes of excessive litigation and aimed to stabilize the property insurance market throughout Florida.

Key Legal Reforms in Florida Property Insurance

Major reforms included eliminating one-way attorney fees and restricting assignment of benefits. The assignment of benefits allowed third-party contractors to take over insurance claims, often resulting in inflated lawsuits and higher costs for insurers. By limiting these practices, the state sought to reduce unnecessary legal disputes and support market stability.

According to the Florida Office of Insurance Regulation, these changes led to a clear reduction in insurance-related lawsuits and slowed the rate of premium increases. Insurance lawsuits peaked at 63,000 in 2021 but dropped by 24% between the third quarter of 2023 and 2024. Many insurers in 2024 filed for no rate increases or even lower premiums, reflecting improved market conditions.

Effects on Citizens Property Insurance and Private Market Shifts

Citizens Property Insurance Corporation, Florida’s state-run insurer of last resort, saw its policy count peak at 1.4 million in 2023. However, as the private market stabilized, this number is projected to decrease to 900,000 by the end of 2024, according to Citizens officials. This shift indicates renewed confidence in private insurers and a move away from reliance on state-backed coverage.

Proposed 2025 Rollbacks and Industry Concerns

New legislative proposals in 2025, including HB 1551 and SB 554, seek to reverse some of the recent reforms. These bills would restore attorneys’ fees to the prevailing party in first-party insurance claims and reintroduce assignment of benefits. Industry groups and regulatory authorities have expressed concern that these changes could increase litigation and drive up insurance costs.

According to the Florida Office of Insurance Regulation, if the rollback bills are enacted, insurers may face higher regulatory costs and more claims disputes. Some insurance carriers have signaled they may exit the Florida market or halt expansion plans if the reforms are undone. Several new insurers have also indicated reluctance to enter or expand in the state under less favorable legal conditions.

Regulatory Oversight and Market Safeguards

Regulatory authorities in Florida are closely monitoring the property insurance market. New requirements mandate that insurers hold substantial financial reserves and provide increased transparency in pricing and litigation expenses. These measures are intended to protect policyholders and promote market stability, according to the Florida Office of Insurance Regulation.

Officials report that these oversight efforts are designed to ensure insurers remain solvent and that consumers have access to reliable coverage options. Details may be updated as regulatory agencies continue to assess the evolving situation.

Condominium Insurance Reforms and Impacts

Additional reforms in Florida’s condominium sector require stricter structural inspections, enhanced reserve funding, and improved disclosure practices. These changes aim to bolster building safety and reduce risks for residents. However, industry experts warn that these requirements could lead to higher premiums and increased litigation for condominium associations, as associations adjust to the new standards.

Expert Perspectives on Florida Property Insurance Stability

Expert analysis from industry groups and regulatory authorities emphasizes the importance of maintaining recent legal reforms to support market stability, lower premiums, and insurer solvency. Rolling back these measures is widely viewed as likely to increase costs, litigation, and volatility in the Florida property insurance market.

The broader context includes Florida’s vulnerability to hurricanes, an aging housing stock, and a history of insurance fraud and litigation. These factors make the property insurance market highly sensitive to legal and regulatory changes, reinforcing the significance of ongoing reforms and oversight.

Frequently Asked Questions About Florida Property Insurance Reforms

What are Florida property insurance reforms?

Florida property insurance reforms are laws and regulations designed to reduce litigation, control premium increases, and stabilize the insurance market. They include limits on attorney fees and assignment of benefits, as well as new requirements for insurers and condominium associations.

How have property insurance reforms affected premiums in Florida?

According to the Florida Office of Insurance Regulation, reforms have slowed premium increases and, in some cases, led to lower rates. Many insurers filed for no rate increases or reductions in 2024 after the reforms took effect.

Are there new proposals to change property insurance laws in 2025?

Yes, legislative proposals such as HB 1551 and SB 554 in 2025 aim to roll back some reforms, potentially restoring attorneys’ fees and assignment of benefits. Industry experts warn these changes could increase litigation and insurance costs.

Can you still get property insurance from Citizens in Florida?

Citizens Property Insurance Corporation remains available as the state’s insurer of last resort. However, the number of policies is projected to decrease as more homeowners return to private insurers.

Where are the property insurance reforms focused in Florida?

The reforms apply statewide, affecting all regions of Florida. They impact homeowners, condominium associations, and insurers throughout the state.