Florida’s legislators aim for major insurance overhaul

As Florida’s 2025 legislative session unfolds, insurance remains one of the most pressing issues, with lawmakers proposing multiple bills aimed at stabilizing homeowners’ insurance premiums and reconsidering the state’s no-fault auto insurance system. The debate comes amid rising costs for both property and auto insurance, as well as growing concerns over the financial stability of state-backed Citizens Property Insurance.

Senator Blaise Ingoglia, a key player in insurance policy discussions, has introduced several proposals to address market instability and hold insurance companies accountable. One of his latest measures, SB 1740, would require insurers seeking approval to operate in Florida to maintain an additional $35 million in reserves beyond what is needed to cover policyholder obligations. The bill also includes new regulations barring executives and attorneys of failed insurance companies from taking leadership roles in another insurer if they were involved within five years before the company became insolvent.

In a bid to encourage homeowners to invest in hurricane and flood mitigation measures, Ingoglia has proposed SJR 1190, which would allow the Legislature to freeze property taxes for homeowners who elevate their homes or take other steps to make them more resilient. If approved by two-thirds of the Legislature, the measure would go before voters in 2026. Another bill, SB 1192, would ensure that these tax benefits remain in place for 20 years.

Despite strenuous efforts to control rising insurance costs, most Citizens Property Insurance policyholders will see their premiums increase in 2025. The state-backed insurer is raising rates by an average of 8.6%, despite claims from Governor Ron DeSantis suggesting a statewide reduction. Only 20% of Citizens customers will receive lower rates this year, while the majority will experience rate hikes, with non-primary residences and mobile homes facing the highest increases. Concerns over Citizens’ financial stability continue to mount, with DeSantis recently stating that the insurer is not solvent and could face serious challenges if a major hurricane strikes the state.

Lawmakers are also demanding greater transparency in how insurance companies operate. SB 1656 and HB 1429, introduced by Senator Jay Collins and Representative Tom Fabricio, would require insurers to disclose payments to affiliate companies and explain how litigation costs, reinsurance expenses, and other internal fees impact customer premiums. A similar bill from Senator Don Gaetz, SB 554, calls for reports detailing executive compensation and financial ties between insurers and their affiliate companies. Gaetz, along with House sponsor Representative Alex Andrade, is also pushing to reinstate Florida’s old one-way attorney fees system, which previously allowed policyholders to recover legal costs when successfully suing insurance companies. This would reverse a 2023 change that required both sides to cover their own legal expenses.

Another significant debate centers on Florida’s no-fault auto insurance system. The current law requires drivers to carry $10,000 in personal injury protection, regardless of who is at fault in an accident. Critics argue that this system contributes to Florida having the highest auto insurance premiums in the country, averaging over $1,500 per year.

Past efforts to eliminate the no-fault system have failed, including a 2021 repeal bill that Governor DeSantis vetoed due to concerns about market disruption. However, with House Speaker Daniel Perez, who previously supported repeal, now leading the chamber, lawmakers are making another attempt. SB 1256 by Senator Erin Grall and HB 1181 by Representative Danny Alvarez propose replacing PIP with a requirement for drivers to carry at least $25,000 in bodily injury coverage per person and $50,000 per accident.

Opponents of the repeal, including lobby group the Florida Justice Reform Institute, argue that lawmakers should wait and assess the impact of recent reforms designed to reduce litigation costs before making further changes. William Large, the organization’s president, has advocated for keeping the no-fault system in place for at least three more years to allow time for data collection.

Florida’s insurance market has struggled for years due to frequent hurricanes, increasing construction costs, and high litigation rates. Citizens Property Insurance, originally intended to serve as a last-resort insurer, has expanded significantly, raising concerns about its ability to cover claims if a major disaster occurs. The company currently holds nearly 943,000 policies, despite efforts to transition policyholders to private insurers.

With homeowners and auto insurance rates continuing to rise, lawmakers are under pressure to strike a balance between consumer protection and industry stability. The outcome of these legislative efforts will have lasting implications for Florida residents, making insurance one of the most contentious and closely watched issues of the 2025 session.

https://www.insurancebusinessmag.com/us/news/catastrophe/floridas-legislators-aim-for-major-insurance-overhaul-527036.aspx