Inflation Drives Up Homeowner Insurance Costs in Florida
The trend of rising homeowner insurance premiums in Florida continued in the early months of 2025. According to the latest data from the Florida Office of Insurance Regulation, average premiums have increased once again after a brief decrease at the end of 2024.
Homeowners with single-family residences saw an uptick of 0.3%, with the average premium climbing from $3,646 to $3,658 from the fourth quarter of 2024 to the first quarter of 2025. Meanwhile, owners of condo units experienced a slightly larger increase of 0.8%, with costs rising from $1,714 to $1,729 during the same period. This information has been highlighted by a report from the South Florida Sun Sentinel that analyzed the quarterly Residential Market Share Report.
Long-Term Trends in Homeowner Insurance Costs
Since the introduction of legislation in 2022 aimed at curbing litigation expenses for insurance companies, average premiums have surged dramatically—by 30.7% for homeowners and 28.8% for condominium owners. These increases were noteworthy as they followed a rare decline in rates of less than 1% for homeowner policies and a 1.7% drop for condo unit policies in the last quarter of 2024. It was the first time since the reports began in 2022 that such declines were recorded.
The Florida Office of Insurance Regulation released this recent information without further commentary, and Insurance Commissioner Michael Yaworsky did not respond to inquiries regarding the rising costs. A spokesperson indicated that it was unlikely Yaworsky would be available to discuss the increases before the publication of the news article.
Factors Behind the Premium Increases
Mark Friedlander, a senior director at the Insurance Information Institute, which is backed by the insurance industry, pointed to rising replacement costs attributable to inflation in construction materials and labor as a primary reason for the increases. He noted that while Florida’s premium hikes are significant, they remain lower than those experienced in many other hurricane-affected coastal states where double-digit increases are commonplace.
Moreover, the rising costs of insurance for Florida consumers came on the heels of an analysis conducted by the insurance ratings firm AM Best, which highlighted improvements in the state’s insurance market. Notably, 2024 marked the first time in eight years that the market posted a collective underwriting profit. AM Best’s report also indicated that the emergence of 13 new private insurers and a reduction in reliance on the state-run Citizens Property Insurance Corporation have contributed to stabilizing premiums and reinsurance prices.
Impact of Legislative Reforms
The positive changes in the insurance landscape were attributed to tort reforms passed in 2022 and 2023 by the Florida Legislature and the governor. These reforms aimed to rectify the rampant litigation costs that were negatively affecting profitability in the insurance sector. Prior to the passage of these laws, insurance experts projected that consumer costs, which were escalating at the time, would stabilize or potentially decrease once existing lawsuits had been resolved.
Ahead of the 2025 legislative session, Yaworsky joined Governor Ron DeSantis at a press conference to highlight the number of insurers requesting either lower or unchanged rates, suggesting an optimistic outlook for the insurance market moving forward.
Debate Over Insurance Reforms
However, the reforms are not without controversy. Critics have argued that they may have disproportionately benefited insurance companies by increasing their profit margins while diminishing policyholders’ influence in claims disputes. A bill supported by plaintiff attorneys aimed at reinstating the requirement for insurers who lose claims disagreements to cover plaintiffs’ legal fees. This bill was passed in the House but failed to advance in the Senate.
According to a comprehensive analysis, insurance premiums rose for 41 out of 61 carriers with more than 1,000 policies. Among these insurers, the Cincinnati Insurance Company reported the largest premium hike of 45.7%. Its policy count dropped from 1,631 to 1,009, yet its average premium surged from $11,014 to $16,044, reflecting the increased risk covered by the company.
Varied Premium Changes Across Insurers
Truck Insurance Exchange also saw a substantial boost, with its 2,390 policyholders experiencing an increase of 16.1%, as premiums rose from $2,059 to $2,390. In contrast, 20 companies experienced price hikes of less than 2%, while 17 insurers saw premium reductions averaging between 0.2% and 9.3%. Notable firms offering lower premiums included several Florida-based companies, such as Edison, Florida Peninsula, and Security First, among others. Citizens Property Insurance Corporation reported a decrease in premiums for its customers by 1.9%, from $3,348 to $3,283.
It’s important to note that the calculations conducted by the South Florida Sun Sentinel excised data from two insurers from both the fourth and first quarters and another company that only reported in the first quarter. Irregularities in data submissions from two of these companies could have led to skewed results. By excluding these outliers, the analysis aimed for a more accurate reflection of changes in the first-quarter insurance costs.
Trends in Condo Association Premiums
Condo associations reported a continuing trend of declining premiums for three consecutive quarters, with rates falling by 5.3% after previous reductions of 2.5% and 3.0%. This decline comes after significant hikes of 103% between June 2022 and June 2024, sparked by enhanced inspection and maintenance requirements aimed at safeguarding property standards.
Overall, while Florida’s homeowners and condo owners face rising insurance premiums, recent developments in the insurance market and legislative reforms offer a glimpse of potential stabilization. The interplay between inflation, construction costs, and legislative actions will likely continue to shape the future landscape of property insurance in the state.
