Right now, most of us Floridians feel blessed to live in our state. Our economy is doing much better than other places in the country, but there are still some major cost-drivers creeping up on us. Property taxes and the cost of property insurance, particularly in coastal markets have really been popping our wallets good.
That is why we were so grateful to see that now that the Florida legislature passed their tort reform packages of 2023, rates have settled down a little bit, and for some of us, they are even starting to go down somewhat. I’ve also read on more than one occasion recently that more insurance companies are beginning to enter the market. There is nothing that will be better to bring rates down than getting more companies to write policies in the state of Florida.
Competition is a great thing for everyone. Nothing was done to provide funding or aid to these insurance companies out of the state taxpayer coffers. In this case, all the legislature did was pass a series of reforms that were designed to bring some commonsense back to our judicial system.
For years, enterprising attorneys would take any kind of a lawsuit against an insurance company. If the company settled for any amount, they became liable for all of the plaintiff’s attorney fees. This created one of the most litigious markets in the country. In fact, while Florida only accounts for 10% of the nation’s insurance policies, we did account for over 70% of the nation’s lawsuits related to insurance.
People forget that insurance rates are based on how much risk and damage is being done to any part of the pool of policyholders being covered. If one policyholder took a massive hit, rates would tend to rise
on all policies to help share that damage.
Despite all the great stories being told on billboards about plaintiffs getting millions, what folks fail to see is that for every $10,000 verdict, there may be $100,000 or more in legal fees. An insurance pool
simply cannot sustain that kind of damage, and rates must go up or companies must close.
Now that has begun to change with the lawsuit reform measures passed in 2023, but I and my friends are worried. The legislature has been pushing to reverse some of those reforms this cycle, and I hope
that the legislature will come to their senses. If not, we are counting on Governor DeSantis to veto those bills, and then maybe we can get to the next few levels of legal reform and push our rates even
lower.