As a small businesswoman, I have to watch every dollar that flows in and out of my business. Unfortunately, that dollar seems to have become a lot less valuable over the last several months. For most of us working families out here, inflation is killing us.
Right now, most of us Floridians feel blessed to live in our state. Our economy is doing much better than other places in the country, but there are some major costs beginning to creep up on us. Property taxes and the cost of property insurance, particularly in this Miami market are really beginning to hurt.
Unfortunately, for many of our friends who either have invested in property rentals or who may be in the process of buying a new home, they are finding that property insurance is getting more expensive.
That is why I was so grateful to see that now that the Florida Legislature passed their tort reform packages of 2023, a move that has provided more incentives for more insurance companies to enter the market. There is nothing that will be better to bring rates down than getting more companies to write policies in the state of Florida.
When I say incentives, I don’t mean anything was done to provide funding or aid to these insurance companies out of the state taxpayer coffers. In this case, all the legislature did was pass a series of reforms that were designed to bring some commonsense back to our judicial system. For years, enterprising attorneys would take any kind of a lawsuit against an insurance company. If the company settled for any amount, they became liable for all of the plaintiff’s attorney fees. This created one of the most litigious markets in the country. In fact, while Florida only accounts for 10% of the nation’s insurance policies, we did account for over 70% of the nation’s lawsuits related to insurance.
People forget that insurance rates are based on how much risk and damage is being done to any part of the pool of policyholders being covered. If one policyholder took a massive hit, rates would tend to rise on all policies to help share that damage.
Despite all the great stories being told on billboards about plaintiffs getting millions, what folks fail to see is that for every $10,000 verdict, there may be $100,000 or more in legal fees. An insurance pool simply cannot sustain that kind of damage, and rates must go up or companies must close.
Now, that has begun to change with the lawsuit reform measures passed last year, and I am truly hopeful that Governor DeSantis will continue to work with the legislature to pass even more reforms. This past legislative session, more reforms were proposed, but the legislators ran out of time. Next year, it is my hope that they will find the time and get part 2 done.
Karen Cardenas is on the Policy Advisory Committee for Floridians for Government Accountability.
