Florida homeowners insurance market recovering, but challenges remain

While Florida's residential casualty insurance companies are recovering from the assets vs. claims crisis a few years ago, there still are challenges facing homeowners when it comes to insuring their property.

Florida domestic property companies reported $944 million in net income as of year-end 2024, up from $292 million at year-end 2023 and reversing the $741 million net loss in 2022 from Category 5 Hurricane Ian that caused an estimated $112 billion in damage, the most for a single storm in Florida history.

A June 27 news release from the Florida Office of Insurance Regulation said that since historic legislative reforms, Florida's market continues to stabilize and now has 14 new companies doing business in the state.

The office is responsible for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets.

State Insurance Commissioner Mike Yaworsky said in the release that additional growth in Florida's insurance market brought two new companies approved to write residential policies.

Incline National Insurance Co. is headquartered in Texas and is now approved to write insurance in Florida for allied lines, homeowners' multi-peril, inland marine, workers' compensation and private passenger auto. The company has more than 75 years of experience with an A rating by A.M. Best. Incline intends to offer policies statewide.

Florida Insurance and Reinsurance Co. will primarily focus on writing coverage for condominiums and condominium associations. The company also plans to provide property coverage for smaller, multi-tenant office buildings.

It specializes in reinsurance brokerage and plans to offer reinsurance products designed to provide exposure management support, enhance underwriting capacity and optimize capital efficiency.

"Our market is becoming more and more competitive, and we continue to see great progress in rate requests with over 120 residential filing requests for rate decreases or 0% increases so far this year," Yaworsky said.

Changing the rules

In 2021, Florida had 6.91% of all U.S. insurance claims in the U.S. – but three out of four property insurance lawsuits (76%) were in Florida.

The high rate of property insurance lawsuits cost a lot of money, which insurers added to their individual property owners' coverage premiums.

Florida insurance reform started in December 2022 when Gov. Ron DeSantis signed legislation that reduced risk-free litigation through the elimination of the one-way attorney fee statute, a policy that allowed a plaintiff or beneficiary in a lawsuit against an insurance company to recover their attorney's fees from the insurer.

That forced some companies out of the state or out of business.

Another change was elimination of Assignment of Benefits in homeowner's policies. It was a legal agreement that transfers the right to receive insurance policy benefits from the policyholder to a third party.

The third party, often a contractor for example, can file claims, make repair decisions and receive payments directly from the insurance company without the policyholder's involvement.

Since 2022, litigation has dropped by nearly 30%, according to the Consumer Protection Coalition.

Homeowners insurance costs fell 0.9% in the fourth quarter of 2024. Since January 2024, 27 companies have filed for a rate decrease and 41 companies have requested no change or 0% increase.

According to three recent publications (S&P Global, Insurance Information Institute and Lending Tree), Florida had the lowest average homeowners rate increase in the nation in 2024, with an average statewide increase of only 1%, the coalition said.

In another sign of the market's rebound, regulators successfully navigated the runoff of Anchor Property and Casualty Insurance Company, based in St. Petersburg.

An insurance company is in runoff when it stops writing new insurance policies. It loses the benefit of ongoing premiums as a source of income to pay claims. The only sources of income become investment earnings, sales of assets and potential recovery from buying a policy to cover its own risk, known as reinsurance.

Through administrative supervision, Anchor Property reentered the market as Patriot Select Insurance Co. The newly relaunched company plans to grow, with a goal of servicing nearly 40,000 policies by the end of 2025.

Homeowners still facing challenges

Despite the legislative reform and improved heath of the industry, many homeowners are finding it difficult to insure their property at a reasonable rate.

"If you don't have a newer home, getting coverage could be a challenge" said Fitzhugh Powell Jr., president of Cecil W. Powell & Co.. the insurance agency his grandfather opened in 1935.

He said years ago, companies were eager to insure homes that were less than 20 years old, but now their preferred market are homes less than 10 years old to limit the risk.

Many of the homes in San Marco, Avondale, Ortega and the Beaches are older than that, so owners have to jump through hoops and have inspections and update the home – like replacing the roof – before a company will write a policy, Powell said.

"You can eventually get insured, but if you have an older house it will cost more to insure than it did a few years ago."