Florida home insurance stabilizes as litigation drops 80%, insurer says

Legal reforms passed by the Florida Legislature in 2022 and 2023, including Senate Bill 2-A, which eliminated key legal incentives for property insurance lawsuits and restricted the assignment of post-loss benefits, have reduced lawsuits and changed the economics of the market, according to executives at Windward Risk Managers, which operates Florida Peninsula, Ovation Home Insurance Exchange, and Edison Insurance Company.

“Our litigation is down 80% since they passed these reforms,” said Stacey Giulianti, cofounder and chief legal officer of Windward Risk Managers. “It continues to decline.”

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Florida accounted for roughly 8% of the nation’s homeowners insurance claims but 76% of its litigation costs, Giulianti said, a disparity that drove premiums higher as insurers absorbed legal expenses.

The reforms targeted legal incentives tied to attorney fees that had encouraged lawsuits. They also prohibited policyholders from assigning post-loss insurance benefits in many cases, a practice insurers said had fueled litigation. Since then, insurers report fewer lawsuits and lower claims activity.

“A lot of the claims were basically manufactured,” Giulianti said. “Once they realized they weren’t going to be able to do that on the back end, they stopped funding the claims.”

Giulianti said claims have fallen to some of their lowest levels in 20 years, another sign that market conditions have shifted.

The shift is showing up in pricing

Windward’s companies have filed for flat or reduced rates in recent years, with some decreases reaching as high as 12%, Giulianti said. He expects that trend to continue as loss ratios improve and legal costs remain contained.

The easing comes alongside increased competition. About 17 new insurers have entered the Florida market in recent years, adding capacity and placing downward pressure on premiums.

“Anybody can budget for weather events,” Giulianti said. “You can’t budget for lawsuits.”

While hurricanes remain a central risk, insurers manage much of that exposure through reinsurance, which absorbs losses above a set threshold.

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Legal costs, by contrast, introduced more volatile financial pressure. Giulianti said insurers can model for storms and reinsurance pricing, but the litigation that followed claims created a less predictable and more expensive tail risk.

Claims frequency has declined and underwriting conditions have stabilized, giving insurers more certainty in pricing.

Regional differences remain. Giulianti said Tampa Bay sees fewer fraud-related claims than South Florida’s tri-county region, where litigation and claims activity run higher.

Building patterns and storm exposure also shape underwriting. South Florida homes are more often built of concrete block, while inland and older homes vary more widely, affecting replacement cost and risk.

Insurers are approaching pricing cautiously as conditions improve.

“We don’t want to drop our rates too low. We don’t want to raise them too high,” Giulianti said. “You want to be able to compete in the marketplace and offer a good product.”