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5 Trends to Watch in 2024: Florida Property Insurance

  1. Continued inflation will provide upward pressure on insurance rates. The strong economic growth we have seen in recent years caused inflation to jump last year and prompted the Federal Reserve’s push on interest rates. Consumers and business felt the pain of higher prices for everything from consumer basics to durable goods. The high cost of rebuilding and labor are significant components of higher premiums for homeowners as well as losses from Hurricane Ian in 2022 and climate concerns. Insurers and regulators expect that some of the reforms put in place last year will help slow the rise in insurance premium increases in the coming years.

  2. Continued population growth and development will strain the insurance market. Florida’s balmy breezes and beautiful beaches are still attracting new residents, even though the Sunshine State often finds itself in the path of major storms. That means development will continue at a steady pace. That also likely means continued upward pressure on insurance rates for homeowners and reinsurance costs for insurers. Florida Gov. DeSantis’ proposed 2024 budget includes bit of relief for homeowners who have experienced double-digit rate increase in the past few years. The governor has proposed a one-year exemption on property insurance taxes, fees and assessments for homeowners with property valued up to $750,000. The savings could average about 6% for owners. There’s one major caveat: this measure requires state legislative approval this spring.

  3. Climate change impact is real. While there is no agreement on the root causes for climate change, storms indeed are stronger and water levels are rising. This poses a significant risk for Florida insurers given the state’s 1,350 miles of coastline. Encouraging homeowners to strengthen their homes to better withstand future storms with improvements such as adding impact-resistant doors and windows, or stronger metal roofs. The state’s strongest in the nation building codes and My Safe Florida Home, which provides some funding for homeowners to tackle such improvements, are big steps in the right direction.

  4. Capacity remains constant challenge. With continued development and greater climate risk, it is no surprise having sufficient insurance capacity in Florida will continue to be chronic problem. There is less traditional reinsurance in Florida today than there was a few years ago. The challenge will be to bring more insurers to Florida to provide coverage and help spread the risk. We saw a few start-ups in 2023 such as Slide Insurance and the Victor Insurance Exchange and are likely to see a few more this year. Capacity remains a challenge not just in Florida, but in other areas across the country such as California and New York.

  5. Claims-related litigation is starting to trend downward. In a special session in late 2022 and during the 2023 Florida Legislative session, lawmakers implemented massive changes to the way claims are processed and eliminated provisions, such as one-way attorney fees and the assignment of benefits, that have contributed to escalating claims-related litigation. These changes have started to work through the industry and benefits – especially reduced litigation – are still ahead. Notwithstanding this, resolving all of the existing litigation will be a drag on Florida insurers for some time yet.

About the Authors:

Fred E. Karlinsky, who is co-chair of Greenberg Traurig’s Insurance Regulatory and Transactions Practice Group, has nearly 30 years of experience representing insurance companies, reinsurers, and a wide array of related entities on regulatory, transactional, corporate, and governmental affairs matters. He is also a recognized authority on national insurance regulatory and compliance issues.

Timothy F. Stanfield, a shareholder with the Florida Government Law & Policy Practice, represents a wide number of private and public-sector clients before the Florida legislature, cabinet, and state agencies. Tim’s practice is largely focused on regulated industries, including insurance, land use, and alcoholic beverages, including addressing ‘tied house evil’ issues. He also represents local governments, trade associations, and clients participating in Florida’s procurement process.

Christian Brito is an of counsel who focuses his practice on national insurance regulatory and compliance matters. He represents a wide variety of entities in the insurance industry, including insurers, reinsurers, managing general agencies, producers, third-party administrators, and claims companies, with regulatory, transactional, corporate, and governmental affairs matters.