Wondering when your homeowners insurance premium will drop? Here's what the state is doing (2024)

Florida homeowners have been battling soaring home insurance rates since 2022, and many are wondering when – or if – they will begin to see some relief.

Florida lawmakers have passed several new laws over the past couple of years they say will reduce premiums, but those savings will take some time to manifest.

Making it more challenging to sue insurance companies, incentivizing new companies to begin writing policies in the state and increasing the funding of the state’s storm-hardening program, My Safe Florida Home, are just some of the changes lawmakers introduced during the 2022 and 2023 legislative sessions.

Here’s a look at how Florida is trying to curb rising home insurance rates and when homeowners can expect lower premiums.

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Florida homeowners have more protections

Florida SB 7052 is a large bill that sought to increase consumer protection and insurer accountability. Under the law, insurers can only cancel an insurance policy during a pending claim once the property has been repaired or a year after the insurer issues the final claim payment, whichever is earlier.

The law also afforded homeowners with open claims whose insurer became insolvent during the process some extra relief by requiring Citizens Property Insurance Corporation to cover the claim.

Insurance mitigation discounts are updated more frequently

Florida SB 7052 introduced a measure that required property insurance mitigations to be updated at least every five years and required insurers to provide consumer-friendly information on their website that describes hurricane mitigation discounts available to policyholders.

Florida lawmakers held insurers more accountable

The largest portions of SB 7052 are aimed at holding insurers more accountable by providing more regulatory oversight over insurers, enhancing enforcement penalties and monitoring companies’ compliance with the new laws through reports.

Here’s a summary of those changes:

• During an investigation or examination, if the FloridaOffice of Insurance Regulation has reason to believe that a law has or may have been violated, OIR shall refer records and information to the Department of Financial Services Division of Investigative and Forensic Services, law enforcement or prosecutors and assist with the investigation.
• Gives additional authority and requires OIR to conduct examinations on insurance companies 90 days following a hurricane if the insurance company reaches a certain level of consumer complaints or claims.
• Outlines when OIR must prioritize examinations of insurance companies based on complaints related to the handling of claims and violations of law.
• Outlines what financial information should be considered by OIR to determine if the continued operation of an insurance company may be hazardous to its policyholders, creditors or the general public and the subsequent requirements to address the financial condition.
• Authorizes OIR to enhance enforcement penalties on insurance companies that meet specific criteria.
• Decreases the amount of time an insurance company or licensed insurance professional has to respond to an inquiry from the Department of Financial Services from 20 days to 14 days. Increases the maximum penalty amount for not responding timely to $5,000 for an entity and $1,000 for an individual licensed insurance professional.
• Increases maximum administrative fines that may be levied by OIR on insurance companies by 250%, generally, and 500% for violations stemming from a governor-declared state of emergency such as a hurricane.
• Prohibits officers and directors of impaired or insolvent insurance companies from receiving a bonus from that insurance company or other entity owned by that insurance company. Violation of this provision is punishable as a third-degree felony.
• The OIR must create a quarterly and annual report that details all actions taken to enforce insurance companies’ compliance with insurance law and code. The report must include the insurance company or licensed insurance professional, the action taken, the violation, penalties, etc.
• OIR must examine high-risk insurance companies at least every three years and average- and low-risk insurance companies at least once every five years.
• Requires insurance companies to notify OIR at least 20 days in advance of a plan to temporarily suspend writing of new residential property insurance policies.
• Prohibits altering or amending an adjuster’s report without providing a detailed explanation as to why any change that has the effect of reducing the estimate of the loss was made. The insurance company must also either create a list of changes and who made the changeorretain all versions of the report.
• Requires insurance companies to post on their website the hurricane mitigation discounts available to policyholders.

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Florida reining in insurance lawsuits

The most impactful reform to come out of the new laws involves insurance lawsuits, which the Insurance Information Institute (Triple-I) says was a large factor in rising premiums.

In October 2022, Triple-I published data showing thatFlorida leads the nation in homeowners’ insurance-related litigation, making up 79% of the lawsuits across the U.S. while accounting for just 9% of the total claims.

In the brief, Triple-I stated that fraudulent roof-replacement schemes and too much litigation, coupled with generous attorney-fee mechanisms, resulted in huge net underwriting losses for Florida’s homeowners’ insurers.

Between 2017 and 2021, data from theFlorida Office of Insurance Regulationshowed that $51 billion was paid out by Florida insurers over 10 years. About 71% of that total went to attorney’s fees and public adjusters, while only 8% went to claimants.

Florida HB 837 seeks to remedy the influx of lawsuits by establishing requirements for what constitutes a bad faith claim and the maximum amounts that an insurance company would be required to pay.

The bill would also prohibit bad faith lawsuits if the insurer has paid the insured either the amount they are asking or the policy limits, whichever is less, within 90 days of receiving notice of the claim — and only if the insured provides enough evidence to support the claim.

It also changes the method used to calculate attorney’s fees awarded by the courts. One-way attorney fees for lawsuits against surplus lines insurance companies, lawsuits against insurers to enforce an insurance policy and several other categories are no longer allowed.

Florida HB 799 changed windstorm mitigation discounts

Another bill, HB 799, requires that insurance companies must take into account the impact of wind uplift prevention mitigation techniques when filing their residential insurance rate filings. The rate filing must include actuarially reasonable discounts, credits or other rate differentials, or appropriate reductions in deductibles.

The wind mitigating techniques include things that enhance wind uplift prevention, roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection and wind, door and skylight strength.

The Florida Office of Insurance Regulation will determine the value of the discounts.

My Safe Florida Home program granted additional funds

In combination with the bills above that enhance the saving opportunities provided by windstorm mitigation improvements, the Florida Senate passed a new bill adding $176 million to the program during a special session in November last year.

The Florida Senate passed the $416 million bill, HB 1C, in a unanimous vote that will provide needed assistance to rural areas in Florida that were hit by Hurricane Idalia and provide the My Safe Florida Home program with enough money to clear its backlog of nearly 18,000 applicants.

Florida’s My Safe Florida Home program is a grant homeowners can apply for that arms them with afree home insurance inspectionreport that provides them with information about their home’s hurricane readiness.

The program also offers recommended improvements to further storm-harden homes and potentially provides $2 to match every $1 the homeowner uses toward the cost of an authorized storm mitigation project.

So, when will Florida home insurance become cheaper?

The uncomfortable truth is that no one is sure about what sort of impact these bills will have on rising home insurance rates. Florida lawmakers say they want to wait for the market to “normalize” once frivolous lawsuits become less frequent.

However, litigation is only one part of the equation. Inflation, which drives up the cost of claims, and an increase in the frequency of severe storms are other contributing factors that have yet to be addressed.