Commitment to free market is key to home-insurance stability

In the face of a nationwide affordability crisis Floridians find themselves grappling with challenges that extend far beyond their control — a consequence of excessive federal spending, regulatory burdens and other cost drivers, supply chain disruptions and additional inflationary pressures.

However, thanks to the leadership of Gov. Ron DeSantis and Florida’s legislative leaders we live in a state that generally taxes lightly, regulates reasonably and spends wisely, which has led to more than 1,000 new residents moving to Florida each day. A headwind to Florida’s continued growth potential is our homeowners’ insurance market, which until recent reforms over the last year was in a tailspin.

Florida’s property insurance crisis was fueled by a man-made litigation epidemic that persisted for over a decade, earning Florida the dubious distinction of a bottomfive national legal climate ranking — we’ve even been known in the past as a judicial hellhole. The staggering statistic that over the previous four years Florida accounted for 7% to 8% of all national homeowners’ insurance claims but an astonishing 76% to 79% of all homeowners’ insurance lawsuits nationwide underscores the unsustainable severity of the issue.

While external factors like inflation and supply chain disruptions contribute to rising insurance rates nationwide, Florida’s unique situation was one largely of our own making.

Every Floridian realizes the negative impact property insurance rates have on the people that call this beautiful state home. Thankfully, state policymakers have made efforts to stem the tide and last year took decisive action to finally address the root cause of the problem — excessive litigation. DeSantis put Florida families and local businesses over billboard trial lawyers when he signed the historic — and overdue — reforms into law, which will help stabilize the state’s market, mitigate the impact of rampant litigation, attract additional capital and foster competition.

A healthy and competitive marketplace is key to providing relief to consumers, and Florida’s commitment to trusting the free market over the years has spared us from many of the problems plaguing other states around the country. Belief in free-market principles has led Florida to being the 14th-largest economy in the world and the preferred destination for people across the country to move their families and businesses.

Some believe it is the proper role of government to step in and dictate mandates and provide rate caps or freezes to provide so-called “rate relief.” Growing the role of government in an attempt to solve problems in the marketplace, such as freezing insurance rates, may sound like a great idea in practice but has never worked in reality, and in fact is a contributing factor to the unenviable position we find ourselves in today.

The prudent thing to do is allow the reforms over the last year to work and to continue to hold bad actors accountable and actively recruit more private-sector competition. Thankfully, there are already many positive signs that the market is recovering following the historic reforms.

This year alone the Office of Insurance Regulation has approved six new entrants into the homeowner’s insurance market; Citizens Property Insurance has seen an 800% increase in takeout requests from the private market; both OIR and Citizens are seeing downward trends in litigation; and in October the Citizens policy count decreased for the first time in three years.

In addition to promising signs seen by OIR and Citizens, private insurers around Florida have indicated they are starting to see light at the end of the tunnel.

At a time when Floridians are facing affordability challenges at home, DeSantis and Florida’s legislative leaders have enacted meaningful solutions to address the challenges in our property insurance market while providing OIR additional tools to hold insurance companies accountable. What Florida needs now is time to let these bold reforms take hold and constant vigilance against new litigation schemes or government intervention in the marketplace that work against the progress we are making.

The Florida Chamber will continue to advocate for a competitive and healthy insurance market that is in the best interest of consumers.

Mark Wilson is the president and CEO of the Florida Chamber of Commerce.