Gallagher Re has released a new whitepaper, Florida Tort Reform: A Sunshine Success Story, analyzing how recent legislative reforms have reshaped Florida’s property insurance market. The report details reforms implemented between 2022 and 2023 and their effects on litigation, insurer performance, and reinsurance market conditions.
Background and Key Issues
Florida has long been considered one of the most challenging U.S. property insurance markets, driven by high litigation costs and exposure to natural disasters. According to the report, domestic Floridian insurers collectively failed to record a single year of profitable underwriting between 2016 and 2022, while homeowners insurance premiums rose 45% from 2017 to 2022. Citizens Property Insurance Corporation, the state’s insurer of last resort, grew its market share to 15% by 2023.
Critics identified “one-way” attorney fees and Assignment of Benefits (AOB) laws as major contributors to the litigious environment. These practices created high claim volumes and significant expenses for insurers, reducing profitability and contributing to rising rates.
Legislative Reforms
- SB 2-A (2022): Eliminated “one-way” attorney fees, abolished AOB for new policies, tightened “bad faith” claim rules, shortened the property claim reporting deadline from two years to one, and reduced the insurer claim response time from 90 days to 60 days.
- HB 837 (2023): Extended reforms to other insurance lines, limited attorney fee multipliers, and adjusted negligence rules.
Market Impact
The report highlights several outcomes following these reforms:
- Lawsuits: Property claims lawsuits have declined significantly, falling to levels last seen in 2019.
- Profitability: Florida’s domestic property insurers reported a collective profit in 2024 — their first since 2016 — despite a $20 billion loss from Hurricane Milton.
- New entrants: Fourteen new insurance companies have entered the Florida market since the reforms, according to the state insurance regulator.
- Citizens’ depopulation: Policies are being transferred from Citizens back into the private market.
- Reinsurance renewals: At the June 1, 2025, renewal, carriers achieved a 10.7% overall risk-adjusted price decrease, along with improvements in terms and conditions.
- Primary rates: Homeowners insurance rates, historically among the highest in the nation, have stabilized, with early signs of decreases.
Florida as a Model
Gallagher Re notes that Florida’s tort reform success has attracted attention from other states considering similar measures to reduce litigation costs and improve insurance market stability.
The report concludes that the reforms have revitalized Florida’s property insurance market, making it more attractive for carriers, reinsurers, and capital providers.
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