Florida Insurance Reform Brings Competition, and Potentially Change, to Market

Florida Insurance Reform Brings Competition

Over the past few years, the market for home insurance in Florida has been tumultuous, to say the least. You’re likely already aware of this, or at least have noticed your premiums seemingly skyrocketing – an issue that insurance companies claim stems from Florida’s homeowner insurance statutes, and other litigation surrounding Citizens Property Insurance Corp., the state-owned “insurer of last resort”. 

The Florida Market is in a Vulnerable Position

Many homeowners in Florida may have found themselves stuck with Citizens insurance after their private insurers were forced to exit the market, many of which left with significant losses after destructive storms such as Irma swept across the state in 2017. Insurers who could no longer bear the burden of claims and losses from these incidents are still resolving these issues from several years ago, and these losses don’t just go away. 

The outstanding claims will inevitably be paid by the Florida Insurance Guaranty Association (FIGA), another organization created by Florida’s insurance legislation. FIGA assures that covered insurance claims are settled even if the providing insurance company becomes insolvent, which results in a mixed bag for homeowners; while it ensures every covered homeowner will have their claim addressed and settled, the money to do so comes also comes from FIGA. In order to garner the funds necessary to settle these claims, FIGA is authorized to leverage assessments on several different types of new and renewing policies, not just those tied to home insurance, resulting in rising costs of insurance across the board for Floridians. 

Insurance Reform May Bring Change

The insurance market in Florida has seemingly been stuck in a downward spiral, with more insurance companies facing liquidation as recently as February. Other financially struggling companies are expected to meet a similar fate over the course of the next year, resulting in even more assessments to cover their claims. Florida seeks to finally break this loop by issuing insurance reform that may make it easier for insurance companies to operate and stay profitable, but this again comes at some cost to customers. 

New reforms have shortened the statute of limitations on insurance claims for customers, which seeks to reduce the overall amount of claims made and shorten legal disputes. Another restricts the amount of legal fees able to be recovered from suits against insurers, hoping to prevent some customers from making their case at the risk of not recovering the costs of going to court. These new reforms only affect the claims made after their effective date, meaning that existing cases will continue to feed into the cycle until they run out. In the end, the reforms are a mixed bag for Floridians. While reducing the number of claims for FIGA to settle means fewer assessments for customers and potentially more insurers entering the market, it comes at the cost of customers’ legal protection. 

If you’re taking your insurance claim to court, get in contact with us. We have years of experience fighting for your claims in Florida and know what it takes to get your claim through the system. Call our team at (954) 315-1155 today to get started.

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John Salas