Homeowner Insurance Costs on the Rise in Florida
During the first quarter of 2025, Florida homeowners experienced a resurgence in insurance premiums, marking a new peak after a slight dip observed in late 2024. This information was revealed in the latest quarterly report from the Florida Office of Insurance Regulation, highlighting the ongoing challenges consumers face in managing insurance costs in the state’s fluctuating market.
The average premium for single-family home insurance rose by 0.3%, increasing from $3,646 to $3,658 between the fourth quarter of 2024 and the first quarter of 2025. Additionally, condominium unit owners faced a more significant hike of 0.8%, with costs climbing from $1,714 to $1,729 during the same timeframe.
Long-Term Trends Following Legislative Reforms
Since the introduction of legislative reforms in 2022, aimed at significantly curtailing litigation costs for insurance companies, average premiums have surged by 30.7% for homeowners and 28.8% for condo owners. These increases have continued despite a minor decrease in costs for both homeowner and condo policies in the previous quarter, marking it as the only instance of declining premiums since the reports began in 2022.
The recent increases were released by the insurance office without any accompanying commentary. Insurance Commissioner Michael Yaworsky did not respond to inquiries regarding the rate hikes, and a spokesperson expressed doubt that he would address the issue before the publication of this report.
Contributing Factors to Rising Insurance Premiums
Mark Friedlander, who serves as the senior director of media relations for the Insurance Information Institute, attributed the uptick in premiums primarily to inflationary pressures affecting construction material prices and labor. He emphasized that Florida’s increases remain comparatively lower than those experienced in other coastal states prone to hurricanes, where double-digit percentage hikes in premiums are becoming common.
This rise in premiums coincides with an analysis from AM Best, an insurance rating firm, that indicated notable improvements within Florida’s insurance market. Highlights from the AM Best report included the achievement of the first collective underwriting profit for the state’s insurers in eight years and the emergence of 13 new private-market insurance providers, which have contributed to stabilizing premium and reinsurance costs. The report also noted a significant drop in policies managed by Citizens Property Insurance Corp., the state-run insurer of last resort.
Impact of Legislative Changes on the Insurance Landscape
The enhancements in the Florida insurance market have been connected to tort reforms enacted in 2022 and 2023, which were designed to alleviate excessive litigation costs that had resulted in substantial losses for insurance companies. During the legislative discussions surrounding these reforms, industry insiders predicted that consumer costs, which were spiking at the time, would eventually stabilize or even reduce once ongoing litigation processes reached conclusion.
Prior to the commencement of the 2025 legislative session, Yaworsky, alongside Governor Ron DeSantis, participated in a press conference to announce that multiple insurers had requested lower or stable rates. Despite these developments, critics argue that the reforms have disproportionately favored insurance companies at the expense of consumers, diminishing policyholders’ leverage during claims disputes. A bill proposed by plaintiffs’ attorneys, which aimed to reinstate requirements for insurers to cover legal fees for plaintiffs in claims disputes they lose, passed in the House but ultimately faced opposition in the Senate.
Insurance Premium Adjustments Across the Market
Analysis indicated that premiums increased for 41 out of 61 insurance carriers that manage more than 1,000 policies. Among Florida-registered insurers, the Cincinnati Insurance Co. experienced the most significant increase, with a staggering 45.7% rise, which raised its average premium from $11,014 to $16,044, despite a decrease in its policy count from 1,631 to 1,009. The average risk covered by this Ohio-based company stands at approximately $2.8 million.
Truck Insurance Exchange also faced considerable premium increases, with a rise of 16.1% for its 2,390 policyholders, escalating rates from $2,059 to $2,390. On the other hand, 20 companies managed to limit their premium increases to less than 2%, and 17 companies reported modest decreases in premiums, ranging from 0.2% to 9.3%.
Insurers that maintained lower premium costs include several Florida-based companies, such as Edison, Florida Peninsula, Security First, Monarch National, American Integrity, ASI Preferred, Safe Harbor, Orange, and Safeport. Notably, Citizens customers experienced a premium reduction of 1.9%, lowering their average cost from $3,348 to $3,283.
Trends for Condo Associations
Condominium associations have witnessed a continued decline in premiums for the third consecutive quarter, with an average reduction of 5.3% after previous decreases of 2.5% and 3.0%. However, it’s important to note that between June 2022 and June 2024, condo association premiums had skyrocketed by an average of 103%, largely due to growing concerns over increasingly strict inspection and maintenance requirements.
Conclusion
The landscape of homeowner insurance in Florida remains complex and fluid, shaped by recent reforms, market dynamics, and consumer response. With rising costs juxtaposed against recent legislative efforts, the future will be pivotal for both consumers and insurers alike as they navigate the evolving insurance market in the state.
