Florida Insurance Faces Major Changes

Florida lawmakers have proposed a raft of bills aimed at resolving the state's crippling insurance crisis.

As state lawmakers convene for the 2025 legislative session, Florida's insurance industry faces potential sweeping changes aimed at addressing rising homeowner premiums, insurer insolvency, and a lack of transparency.

Why It Matters

For a number of years, Florida has been grappling with an insurance crisis fueled by frequent hurricanes, rising litigation costs, and insurers exiting the market.

Citizens Property Insurance Corp, originally created as an insurer of last resort, currently has 847,571 policies in force as of February 28, and remains financially strained. Despite efforts to stabilize rates, the average increase in Citizens' premiums will be 8.6 percent this year, when combining primary and non-primary residence accounts.

What To Know

A key proposal is Senate Bill 1740, introduced by Republican state senator Blaise Ingoglia. It would require insurers to maintain an additional $35 million in reserves, beyond the amount needed to cover policyholder obligations.

The bill also stipulates executives and attorneys of failed insurance companies would be barred from taking leadership roles in another insurer if they were in position during the five years leading up to insolvency.

Senator Ingoglia said in a statement last week: "Executives at insurance companies that have previously bankrupted their companies should not be exploiting loopholes and skirting the intent of current law... Policyholders and rate payers deserve better," per the Tampa Bay Times.

Ingoglia has also proposed an amendment to Florida's constitution, SJR 1190, which would allow property taxes to be frozen for homeowners who take certain resiliency measures. The bill would require the approval of two-thirds of the Legislature to pass, before going before voters. Another bill, SB 1192, would guarantee that these benefits remain in place for 20 years.

Meanwhile, Senate Bill 1466, filed by Republican state senator Nick DiCeglie, would help fund the My Safe Florida Home program, which offers grants of up to $10,000 to support homeowners to upgrade their homes. The program has swiftly run out of money in recent years.

DiCeglie's proposal would mandate that five percent of sales taxes recouped in hurricane-hit counties in the two months after a storm would be allocated to pay for the program. Meanwhile, under DiCeglie's other proposal, SB 1468, buying impact-resistance windows and doors would be tax-exempt during a specific month.

Transparency within the industry is the focal point of Senate Bill 1656, proposed by Republican state senator Jay Collins, and House Bill 1429, would require insurers to file a "transparency report" when filing rate requests with regulators.

Within the reports, insurers would be required to breakdown a number of costs, including; profits, litigation fees, affiliate payments, claims, and reinsurance.

Meanwhile, SB 554, proposed by Republican state senator Don Gaetz, would require regulators to report insurance executives' financial compensation and their companies' profits or losses. It would also detail the financial relationship between insurers and affiliates with at least 10 percent common ownership.

Gaetz is also attempting to reinstate Florida's one-way attorney fees system, which before 2023 allowed policyholders to recover legal costs when successfully suing insurance companies.

Newsweek has contacted Senators Ingoglia, DiCeglie, Collins and Gaetz for comment.

What People Are Saying

Sen. Ingoglia wrote on X, formerly Twitter, in February: "My proposal: Let's incentivize resiliency by freezing current property taxes for 20 years for those who elevate and harden their homes. Government shouldn't be the beneficiary of home hardening. Homeowners and premium payers should."

Governor Ron DeSantis said in a statement in February: "For the last four years, inflation spurred by the Biden Administration, active hurricane seasons, and unchecked litigation in Florida made for an environment that caused turbulence in insurance markets and steep increases in premiums. There are a lot of factors involved in insurance rates, and Florida's property and auto markets are challenging—but... data suggests that in 2024, Florida had the lowest average homeowners' premium increases in the nation, and the overall market has stabilized with 11 new companies having entered the market over the past two years."

What Happens Next

The next two months will be critical as lawmakers refine and debate the insurance proposals.

If the constitutional amendment on property tax freezes passes, it will go before voters in 2026.