Florida’s property insurance market is showing signs of recovery due to legislative reforms aimed at curbing litigation and stabilizing market conditions. Despite facing three major hurricanes this year, the market continues to stabilize, according to Tim Cerio, the President and CEO of Citizens Property Insurance Corp.
The legislative changes included provisions that make it more difficult for policyholders to engage in legal disputes with their insurers. This move was designed to combat litigation driven by fraudulent claims. Consequently, 15 insurance companies have made 22 filings for rate decreases, and 29 companies have filed for no increase in rates this year.
Moreover, insurance companies have reported reductions in reinsurance costs compared to 2023. This financial stability has resulted in many insurers reporting net profits for the year, a stark contrast to previous years marked by underwriting losses.
Efforts to transfer policies from Citizens to private insurers have surpassed expectations, with Citizens expecting to end the year with 369,000 new policies—30 percent below forecasts. The number of policies held by Citizens fell below one million last month and is projected to decrease further by year-end.
Citizens was established as an insurer of last resort, but recent efforts have focused on reducing its policy count due to the financial risks associated with major hurricanes. Policyholders across the state could face “assessments” to cover claim costs if Citizens is unable to pay directly due to reduced capacity.
A majority of policies transitioning to private insurers come from high-litigation areas such as Broward, Miami-Dade, Palm Beach, Hillsborough, and Pinellas counties. This shift reflects insurers’ growing confidence in the market reforms, which have led to positive outcomes.
The importance of depopulating Citizens is emphasized by the desire to minimize competition with the private market and reduce potential assessments for non-Citizens policyholders.
To date, Citizens has settled property claims exceeding $516 million related to Hurricanes Debby, Helene, and Milton, with a significant portion of payments going towards settlements for Hurricane Milton. Additional payments of $52.6 million were made for policyholder expenses from these storms.
Overall, the legislative reforms have played a crucial role in bringing Florida’s insurance market back from the brink, fostering increased competition and financial stability.
Source: FloridaRealtors
