End Florida’s Insurance Nightmare
Joshua wrote this in December 2022, days before the reforms that reshaped Florida’s market, and we keep it here because the reasoning still explains today’s prices. What has changed since is in the note below, and we are glad to walk you through it.
In this guide
- Repeal Florida’s one-way attorney fee statute
- Allow insurers to offer roof settlement on an actual cash value basis (ACV) or a roof value schedule (RVS.)
- Similar to how the state fixed the sinkhole crisis, use engineering standards to define roof damage in statute
- Force Citizens Insurance to charge actuarially sound rates
Editor’s note: Joshua wrote this in December 2022, days before the Legislature’s special session. That session passed SB-2A, which enacted the core reforms argued for below. Since then, new carriers have entered Florida and Citizens has shed hundreds of thousands of policies through depopulation. For the current market, see our 2026 Florida Homeowners Insurance Guide.
In Florida’s insurance agencies, every day is Groundhog Day. The day starts when a caller, usually filled with panic and disbelief, describes their personal home insurance fiasco. Property insurance rate increases of 50 to 200 percent are now commonplace, with some topping 300 percent. Worse than a rate increase, are those canceled or non-renewed because their insurance company went out of business (Florida lost six property insurance companies in 2022 alone,) or the company no longer had enough financially required reinsurance to offer a renewal. In these cases, the mortgage servicer “force places” a policy to cover the amount owed on the mortgage. That premium is usually three to four times the cost of a typical policy, and with less coverage. The bill appears in the mortgage statement, and the scramble for coverage becomes an act of desperation. The official numbers back this up. The Florida insurance crisis has left homeowners scrambling for affordable coverage and reliable protection.
According to the Insurance Information Institute (III,) At the time (2022), Floridians paid a staggering three times the national average ($4,231 vs $1,544.) At first blush, it sounds like Florida has a greedy insurance industry problem. Until, according to Florida’s Office of Insurance Regulation, you realize our property insurance companies lost hundreds of millions each year over the past five years, with losses topping more than $1B in 2020 and 2021. What is happening is unsustainable for consumers and insurance companies.
While there are several contributing factors to the market’s demise, the primary driver is the incessant, well-oiled cottage industry of roof and claim litigation. According to the Florida governor’s office, in 2021, Florida had 116,000 property claim lawsuits accounting for more than 79 percent of all the litigation in the entire United States. For perspective, California, a state with nearly twice the population of Florida, had only 3,500 property insurance lawsuits in 2021, according to III. This cottage industry flourishes by the unintended consequence of law and regulation. Competition from the state insurance company Citizens, which admits it charges too little for coverage, is now the straw breaking the camel’s back.
Bold, decisive action in the upcoming special session is required. But doing so will put Florida’s property insurance market on the path to solvency and stability, driving down rates for Floridians. Solving the Florida insurance crisis requires bold legislative action and market reform.
These are the essential fixes.
1. Repeal Florida’s one-way attorney fee statute
This is the lynchpin and main culprit of the runaway litigation. This statute allows a law firm to enter the ring with the insurance company’s hands tied behind its back. The statute forces an insurance company to pay the policyholders’ attorney fees when a claim is challenged in court and won by a percentage of a pre-suit settlement offer. What sounds like a reasonable consumer protection has allowed a few lawyers to take potshots at insurance companies, no matter how futile the claim. Remember, in 2021 Florida accounted for 79 percent of the litigation in the country, and this statute is the primary reason. (Repealed by SB-2A.)
2. Allow insurers to offer roof settlement on an actual cash value basis (ACV) or a roof value schedule (RVS.)
Similar to how we insure vehicles, ACV and RVS would allow a carrier to provide a scheduled payout based on the age of a roof. This will allow companies to take the risk of offering coverage on older roofs and ultimately drive down premiums for consumers. (Enacted via Florida’s 2022 reforms.)
3. Similar to how the state fixed the sinkhole crisis, use engineering standards to define roof damage in statute
A court case in 2016 called the Sebo case, opened the door for everyday wear and tear to be litigated and challenged. The market cannot sustain replacing every old roof in Florida.
4. Force Citizens Insurance to charge actuarially sound rates
Citizens insurance is presently on the hook for more than 1m policies. This represents a clear and present danger to the financial stability of our state, should the big one hit. Artificially low rates are also a barrier to more capital entering the market. More capital is the catalyst for long-term stability and rate reduction.
Floridians deserve a robust and competitive insurance marketplace with lower rates and better coverage. As arguably one of the highest-risk property insurance markets in the world, we must have the most favorable legal and regulatory environment if we want to attract more capital and deliver for consumers. That will only happen if our leaders take bold action in this special session.
It’s time to end Florida’s insurance nightmare. Learn more about how the Florida insurance crisis affects your homeowners coverage by reading about the top five policy exclusions or contacting Cornerstone Insurance for a free policy review. Ready to compare A-rated Florida carriers today? Get a quote.
This story FAQ
What did the December 2022 special session change?
Senate Bill 2A repealed the one-way attorney fee statute, ended assignment of benefits on property policies issued from January 1, 2023, and cleared the way for roof settlement schedules, the core fixes argued for in this piece.
Why were Florida premiums three times the national average in 2022?
Insurance Information Institute figures put the Florida average at $4,231 versus $1,544 nationally, driven largely by claim litigation. Florida had about 116,000 property claim lawsuits in 2021, roughly 79 percent of the national total.
What does force-placed insurance mean?
When a policy is cancelled and not replaced, the mortgage servicer buys a policy that protects the loan balance only, usually at three to four times the cost of a normal policy, and adds it to the mortgage statement.
Has the market improved since this was written?
Yes. New carriers have entered Florida, Citizens has moved hundreds of thousands of policies back to private carriers through depopulation, and rate increases have slowed. Our 2026 Florida homeowners guide covers the current market.