Florida TaxWatch Releases Briefing on Florida’s Property Insurance Market

Tallahassee, Fla. – Today, Florida TaxWatch released its Briefing: Florida’s Property Insurance Market, informing Florida taxpayers of the current status and stability of the property insurance market, sharing that unless a long-term solution is established, the high cost of insurance will drive many Floridians out of the state.

Florida TaxWatch President and CEO, Dominic M. Calabro said, “The high cost and availability of property insurance is an issue that impacts all of us, and Florida TaxWatch once again reminds policymakers that while initial measures in bringing premiums down and attracting insurance companies into the market – and ending frivolous lawsuits – show promise, it will take continued vigilance, so all Floridians have peace of mind, knowing they can obtain affordable insurance for their homes this hurricane season and beyond.”

Over the past five years, Florida lawmakers have worked to stabilize the state’s property insurance market, with initiatives primarily focused on reducing insurance fraud, maintaining sufficient reinsurance levels, studying the growth of premiums, and limiting reliance on Citizens Property Insurance Corporation (Citizens). Several reforms were addressed and enacted, including:

• Reducing Insurance Fraud – Following the Jan. 2023 Assignment of Benefits (AOB) prohibition, the number of ‘intentions to litigate’ decreased, with March 2023 at 8,345 ‘intentions’ filed down to 4,064 in November. While money spent on legal defense and cost containment as a percent of premium was the smallest ratio since 2019 (3.1 percent), it is still higher than the national average of 1.2 percent last year.
• Maintaining Reinsurance Funds – Reinsurance (the insurance for insurers), helps insurance companies cover losses from abnormally destructive hurricanes. Residential property insurers are required to obtain reinsurance from the Florida Hurricane Catastrophe Fund (CAT Fund), and in 2022, they are also now required to participate in the Reinsurance to Assist Policyholders (RAP) Program – providing a non-recurring $2 billion to cover insurers losses, and in turn, to help reduce policyholders’ premiums.
• Steadying the Growth and Premium Rates – Since the implementation of the reforms in 2022 and 2023, eight new companies have joined Florida’s property insurance market, 10 companies filed a zero percent increase, and 10 companies filed for rate decreases, expected to take effect this year.
• Limiting Reliance on Citizens – As of December 31, 2023, Citizens comprised 16 percent of the total personal residential property share, enrolling 1.2 million policyholders and amounting to 13 percent of total insured value; however, efforts to depopulate Citizens are improving through its ‘Depopulation Program,’ which successfully transitioned 223,307 policyholders to private insurance companies in 2023. 

In addition, during the 2024 Legislative Session, the final tax package provided homestead property owners with a one-year exemption on taxes on residential property and flood insurance. Based on Florida’s average annual premium ($6,366), exempting homeowners from the 1.75 percent tax would save each homeowner about $111. To make Florida’s insurance rate competitive with the national average ($2,153), the average annual premium needs to fall by more than $4,000. 

To keep Floridians from leaving the state, policymakers should consider how to offer greater relief in the present or facilitate quicker reductions in rates.

To learn more and access the full briefing, please click here.

About Florida TaxWatch
As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute, and the trusted “eyes and ears” of Florida taxpayers for more than 45 years, Florida TaxWatch (FTW) works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on taxpayers and businesses. FTW is supported by its membership via voluntary, tax-deductible donations and private grants. Donations provide a solid, lasting foundation that has enabled FTW to bring about a more effective, responsive government that is more accountable to, and productive for, the taxpayers it has served since 1979. For more information, please visit www.FloridaTaxWatch.org.