March 5, 2025 -Ben Jones

Florida Insurance Woes as Challenges Mount for Homeowners and Drivers

Florida is at a crossroads when it comes to its insurance market, with homeowners and automotive policyholders grappling with escalating costs and industry instability. State lawmakers are taking on the issue with proposed laws that aim to create transparency, reduce premiums, and hold insurance companies accountable. However, with rising property insurance premiums and Florida’s rank as the most expensive state for car insurance, finding a workable solution is proving complex. Here’s a closer look at what’s happening, why it’s important, and how it could impact you.

Property Insurance Upheaval: From Rising Premiums to New Incentives

For homeowners, property insurance has become an overwhelming expense. This year, Citizens Property Insurance, Florida’s state-backed insurer, is increasing rates by an average of 8.6%. Nearly 80% of policyholders will see higher costs, with non-primary residences and mobile homes hit hardest. Governor Ron DeSantis has expressed concern over Citizens’ financial health, stating it could struggle to cover claims in the event of a major hurricane.

To counter these issues, lawmakers have filed several bills aimed at incentivizing storm and flood-resilient upgrades. One such proposal, SJR 1190, would freeze property taxes for 20 years for homeowners who elevate their homes or install hurricane-hardening features. This measure, coupled with state grants of up to $10,000, aims to reduce the number of claims filed after storms, thus lowering insurance costs in the long term.

But lawmakers are divided on whether these efforts are enough. Some argue that deeper reforms addressing insurance company practices and financial transparency are needed to stabilize the market, especially as rising housing costs continue to amplify the crisis.

What’s Driving Higher Insurance Costs in Florida?

Florida’s property insurance market faces unique challenges, including frequent hurricanes, increasing construction costs, and a litigious culture. A Tampa Bay Times investigation revealed that insurers, while raising rates, often pay exorbitant fees to affiliate companies for basic services, boosting profits while

To remedy this, new bipartisan legislation (SB 1656/HB 1429) would require insurers to disclose payments made to affiliate companies and explain how litigation and reinsurance expenses influence premiums. Another proposal (SB 554) takes this further by requiring detailed reports on executive compensation and financial ties between insurers and their affiliates.

These changes aim to bring visibility into an opaque market, empowering regulators and consumers to make informed decisions. For homeowners, this could mean a clearer understanding of why their premiums continue to rise and what needs to change to make insurance more affordable.

Auto Insurance Reform: Another Frontline in the Debate

On the automotive side, Florida’s no-fault auto insurance system, which requires $10,000 in personal injury protection (PIP), has long been criticized for inflating premiums. The state’s car insurance costs are the highest in the nation, averaging over $1,500 per year.

While past attempts to repeal the no-fault system stalled, momentum is growing for change. Proposed legislation (SB 1256/HB 1181) would replace PIP with a fault-based system, requiring drivers to carry at least $25,000 in bodily injury coverage per person and $50,000 per accident. House Speaker Daniel Perez, a longtime advocate for PIP repeal, supports the effort, believing it could alleviate financial pressure on drivers.

Critics, however, urge caution. Organizations like the Florida Justice Reform Institute have called for a three-year pause to gather data on recent policy changes, such as the elimination of one-way attorney fees. They argue that rushing into a new system could lead to unintended consequences, including market disruptions and higher rates for some drivers.

Technology Advancements Shake Up the Insurance Space

Amid regulatory debates, technology is playing an increasingly important role in modernizing Florida’s insurance industry. Companies are leveraging artificial intelligence and predictive analytics to streamline claims processing. For instance, AI-powered tools can assess property damage from drone imagery and satellite data after hurricanes, cutting down the time it takes to process claims and pay out benefits. Additionally, digital platforms enable consumers to compare policies, manage claims, and receive instant customer support—all from their mobile devices.

Telematics is another emerging technology being integrated into auto insurance policies. By analyzing real-time driving behavior through smartphone apps or in-car devices, insurers can offer usage-based policies with rates tailored to how safely someone drives. This not only provides more affordable options but also encourages safer driving habits.

While these tools won’t solve systemic issues like market instability, they offer a glimpse of how innovation can improve the customer experience, create efficiencies, and potentially lower costs.

Why It Matters—and What’s Next

For Florida residents, the stakes couldn’t be higher. With hurricanes becoming more severe and inflation persisting, the financial burden of insurance is only expected to grow. Legislative efforts to increase transparency, freeze taxes, and support resilient housing upgrades could alleviate some of the immediate pressures. At the same time, advanced technologies are making it easier for policyholders to manage their coverage and find savings.

Looking ahead, consumers can take steps now to better protect themselves. If you’re a homeowner, explore grant opportunities for storm-hardening upgrades and check with your insurer about discounts for safety improvements. Auto policyholders should shop around, considering usage-based insurance plans if you’re a safe driver with relatively low mileage. And for both, stay informed about legislative changes that could influence your premiums.

Florida’s insurance market is an ongoing challenge. But through a combination of legislative reform, technology-driven solutions, and individual action, there’s hope that residents can find much-needed relief while safeguarding their homes, vehicles, and financial futures.