by Sam Elliott, The Florida Council for Safe Communities
Summer has arrived. As of June 1, Hurricane Season is right here with it. Homeowners and small businesses are stocking up on their supplies. They are also checking their insurance policies.
For the last two years, Florida’s insurance marketplace has shown significant improvement. The number of new insurers coming into the Florida market has almost quadrupled since last year. Automobile insurance rates have done more than decrease. Hundreds of thousands of customers have actually received rebate checks. More importantly, Citizens Property Insurance, the state’s insurer of last resort, has decreased significantly, with many of that taxpayer-backed entity’s policies being taken over by private insurers. At its peak in late 2023, Citizens held over 1.4 million policies. As of April of this year, that number has dropped to less than 300,000 policies.
This complete turnaround of Florida’s insurance market is astounding, and Florida is the only state in the country where rates of both auto and property insurance have either flattened or decreased. Let me repeat. The only state.
Prior to 2023, Florida was considered a judicial hellhole due to our litigation environment. The reason for this is that our state had a system of one-way legal fees. That meant that if a consumer sued an insurance company, if the insurance company settled for any sum, no matter how small, they would be 100% liable for the plaintiff’s legal fees. For the billboard attorneys, it was a system of guaranteed payouts. Every case was accepted and every case pursued no matter how frivolous.
The 2023 litigation reform proposed by the governor and legislature put a stop to that system, and the frivolous lawsuits stopped. This is the great reason why the cost of insurance has fallen so significantly.
Under the former system, frivolous lawsuits and even more frivolous settlements and subsequent legal fee payouts were driving up the cost of insurance, and that cost was being built into almost every good and service offered by even the smallest of small businesses.
It is unfortunate that many legislators do not understand the way the system worked before because they could more readily appreciate where we are now. Affordability is the word of the day and the issue of the year. But in Florida, at least with insurance, we are doing better than the rest of the country because we have good leaders who know the difference between a legitimate claim and a frivolous lawsuit.
Now let’s hope future legislators also know the difference and refuse to take the bait and turn back the clock. For now, at least for this hurricane season, policyholders are better off than ever before and ready to face the challenges. If we get another year with a light hurricane season, Florida’s insurance market may accomplish the full resilience it has always needed.
