Florida's insurance sector is showing considerable improvement as recent reforms take hold. A substantial decline in fraud and unwarranted lawsuits has attracted insurers back to the market, while both commercial and residential insurance premiums have noticeably decreased. Yet, the full extent of Florida's insurance challenges may not be resolved just yet.
The tort reform measures implemented in 2022 and 2023 seem to be yielding encouraging results. However, amid these positive changes, the legal environment remains complex, with soaring verdicts and settlements still impacting the casualty insurance market across the state. Clearwater's roadways are still dotted with billboards for personal-injury attorneys, a reminder that some aspects of the previous litigation climate persist.
Impact of Tort Reform
After Hurricane Ian wreaked havoc in late 2022, Governor Ron DeSantis enacted a comprehensive tort reform strategy. This pivotal legislation eliminated the customary awarding of attorney's fees to property insurance claimants who won disputes, changing the dynamics of how claims are processed. Furthermore, the new laws prohibited assignment-of-benefits agreements, which allowed homeowners to hand over their claim rights to contractors. This practice had contributed significantly to inflated claims and encourages questionable practices among contractors after storms.
Randy Fuller, who leads Florida operations for reinsurer Guy Carpenter, remarked, "The reform was more effective than anyone could’ve dreamed," underscoring the scale of the previous issues. Analysis of over 1.4 million homeowners' policies from Fuller’s team reveals a staggering 69% drop in claim frequency and a 74% reduction in claim severity for areas affected by similar winds during Hurricane Milton in 2024 compared to Hurricane Irma in 2017.
Further reforms introduced in March 2023 extended these measures beyond property insurance. The time allowed for claims was reduced, and the standards changed to require plaintiffs to bear more than 50% liability in order to seek damages, fundamentally altering the landscape of civil claims in favor of defendants.
Declining Costs and Market Restoration
These sweeping changes have resulted in significant cost reductions for insurers, with A.M. Best reporting a drop in defense and cost-containment expenditures to $131 million in 2025, down by nearly 80% from the peak expenditure in 2022. Alan C. Nash of Marshall Dennehey noted a change in litigation tactics, stating that attorneys are now less likely to pursue cases with minimal medical bills or shared liability. This shift results in more efficient claim resolution.
Policyholders are gaining advantages as more insurers return, drawn by an increase in reinsurance and available catastrophe-bond capital. Dan Cioci from Brown & Brown indicated that national carriers are cautiously optimistic, expanding their roles in Florida each year. With the number of commercial properties insured by the state-owned Citizens Property Insurance dropping from 13,600 in 2024 to approximately 4,500, the stabilizing market is increasingly favoring private insurers.
Insurance rates also reflect this recovery. The average cost of surplus-line commercial property insurance saw a remarkable 35% decrease in the first half of 2026 compared to the previous year, while builders’ risk and windstorm policies saw declines of 30% and 28%, respectively. Cioci attributes these reductions to both the tort reforms and a relative lull in storm activity, with Hurricane Milton marking the last major impact in October 2024.
Liability Insurance Dynamics
The liability insurance sector, however, remains in flux. The Florida Surplus Lines Office reported a stabilization in commercial general liability policy costs after a long period of increases, yet commercial auto liabilities are projected to rise consistently this year, reflecting national trends. Carol Murphy from Howden U.S. noted that driving behaviors, which shifted negatively post-pandemic, are still influencing premiums.
While some sectors, particularly those with high premises liability risk, await improvements, others are experiencing more competitive conditions. Albert Geraci of the Florida Surplus Lines Association sees a promising market for certain buyers, as some insurers are expanding their coverage offerings in response to competition.
That said, the tort reform measures have not entirely mitigated the issue of "social inflation." Although the state's ranking concerning significant jury verdicts has improved, the overall trend across the nation indicates a surge in high-value corporate judgments. Even with a reduction in low-quality claims, there remains a trend of higher stakes and more rigorous litigation in cases where liability is clear.
Challenges for Policyholders
Despite the advancements brought by tort reform, some advocates argue that the changes have resulted in unintended burdens for policyholders, shifting many risks onto them. According to Steven M. Bush, a policyholder attorney, these legislative adjustments can leave property owners with insufficient time to properly file claims, and it complicates the process of obtaining legal representation for smaller claims.
Beyond procedural shifts, insurers have tightened policy coverage further, providing depreciated cash values rather than full replacement costs for damaged roofs. Critics of the insurance industry assert that the systemic changes have allowed insurers to maximize savings through restricted payouts rather than genuinely curtailing litigious behaviors.
While some policyholders can appeal through state regulators for fair treatment concerning their claims, the insurance landscape remains precarious. Increased scrutiny over claims practices continues, with instances surfacing of insurers underreporting or misestimating damages following investigations.
Looking ahead, the durability of Florida's legislative reforms will face ultimate tests when new natural disasters strike. As Fitch Ratings warned, the long-term viability and efficacy of these measures have yet to be fully determined, especially in an era of increasing weather volatility.
As other states consider similar reform measures, Florida's experience may serve as a vital reference point for assessing the potential benefits and challenges of such legislative actions amidst a changing insurance climate. The balance between protecting policyholders and ensuring a stable insurance market remains a key area of focus in ongoing discussions surrounding insurance reform across the country.