Ken Levine discusses five factors that have affected the Florida homeowner’s insurance market over the past several decades in the FORC Journal of Insurance Law and Regulation. Geography, the aftermath of Hurricane Andrew in 1992, rampant claim litigation and outright fraud, periods of sustained net underwriting loss and upticks in insolvency, and the reaction to the Surfside condominium building collapse have all been significant contributors – some helpful, some harmful. The devastation of Hurricane Andrew led to Florida introducing sweeping reforms, including stricter building codes, mandatory reinsurance through the Florida Hurricane Catastrophe Fund, hurricane deductibles, and the creation of Citizens Property Insurance Corporation. These efforts aimed to stabilize the market and manage risk more effectively, while also marking a fundamental shift in how insurance was underwritten and delivered in Florida.

The market also faced new disruptions in the form of abuse related to an assignment of benefits scheme, which led to excessive litigation, fraud, and insurer insolvencies. By 2021, Florida accounted for a disproportionate share of national property insurance lawsuits, which drove up premiums and strained insurer capacity. Legislative reforms in the following years eliminated one-way attorney’s fees and established programs like Reinsurance to Assist Policyholders and Florida Optional Reinsurance Assistance to bolster reinsurance availability. The collapse of the Surfside condominium prompted further regulation of multifamily buildings, raising insurance and maintenance costs dramatically. While it seems as though the market is beginning to stabilize with new insurers entering the market, significant challenges persist.

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