Optimistic Forecast for the Insurance Industry in 2025

TAMPA, Fla. – With the prospect of another active hurricane season on the horizon, insurance experts suggest that the property insurance landscape in Florida is witnessing positive changes for homeowners and business owners. In fact, some professionals in the field argue that the industry is showing signs of recovery, which, given the recent challenges, represents significant progress.

Improvement from a Challenging Past

The backdrop for these improvements includes several years marked by catastrophic storms that left many regions devastated, compelling numerous insurers to exit the state or go bankrupt. This resulted in a considerable number of homeowners and businesses facing abrupt policy cancellations. Those fortunate enough to secure new coverage often found themselves paying much higher premiums for similar, if not reduced, protection, with further hikes shortly thereafter.

However, from the ashes of this insurance crisis, a sense of manageability and stability is beginning to emerge.

Current Market Trends

Mark Friedlander, representing the Insurance Information Institute, remarked that insurance rates across Florida are leveling off, with some areas actually experiencing declines.

“We’re definitely on the right track,” Friedlander indicated. “The market appears stabilized, even after three hurricanes affected Florida last year—Debby, Helene, and Milton.”

The Florida Office of Insurance Regulation supports these observations, confirming ongoing stabilization within the insurance sector following critical reforms introduced in 2022 and 2023.

Reports delivered to the governor and Legislature in early 2025 highlighted the continued positive trajectory of the market as a result of recent legislative actions. These reforms aim to enhance consumer protections, bolster the Citizens Property Insurance Corporation, and stimulate insurer and reinsurer investments through improved market clarity, the report detailed. The data for 2024 suggests a modest downward trend in rates for the first time in years, with 32 companies filing for no rate increase and at least 17 filing for decreases.

Changes in Insurance Premiums

“Overall, we are beginning to see some stabilization in rates,” noted Bob Rollins, president of The Beacon Group, Inc. in Boca Raton.

Rollins pointed out that factors such as the age and structure of homes play crucial roles in determining rates. “Many properties built in the 1950s and 1960s still have the same tiled roofs,” he explained. The presence of wind mitigation features is increasingly significant in reducing costs, emphasizing the importance of windstorm protection.

Rollins praised recent legislative changes, stating, “These efforts have made a substantial difference.”

Positive Outlook from Industry Leaders

Brian Chapman, president and CEO of Chapman Insurance Group, expressed strong confidence regarding the state’s insurance environment. With extensive operations across Southwest Florida and a client base of approximately 30,000, the majority in Lee, Collier, and Charlotte Counties, he believes the industry has fully regained its footing.

“We are past any concerns about recovery; we’ve effectively bounced back,” Chapman asserted. He further noted a definitive downward trend in rates over the past six months, stating that clients in Southwest Florida are witnessing an average reduction of 15% to 20% in their insurance premiums year-on-year.

Furthermore, the state’s Office of Insurance Regulation reported the entry of 10 new companies authorized to provide homeowner policies, fostering increased competition and more options for consumers seeking better coverage at lower rates, according to Chapman.

Importance of Adequate Coverage

Nonetheless, understanding the insurance coverage needs remains vital. The Insurance Information Institute highly recommends conducting a thorough insurance review with an agent to ensure homeowners and businesses possess adequate protection, especially during hurricane season. This means recognizing that property insurance and flood insurance are separate coverages, which many homeowners may overlook until it’s too late.

Friedlander highlighted that many homeowners mistakenly believe their property insurance encompasses flood coverage, only to discover this is not the case after a disaster strikes. In Florida, homeowners typically have windstorm coverage, indicating protection against hurricane-related damages, but flood protection requires a separate policy.

Navigating Flood Insurance

Many homeowners attempt to forgo windstorm coverage to save costs unless they own their properties outright, as mortgage lenders often mandate such coverage to safeguard their investment.

Additionally, mortgage lenders may require flood insurance based on the property’s location in a designated flood zone. If FEMA categorizes an area as high-risk, homeowners are typically required to secure flood insurance.

The declarations page of a standard home insurance policy outlines coverage limits and deductibles, emphasizing the need to verify the dwelling replacement cost, which reflects how much it would cost to rebuild or repair the home—not the market value estimated by real estate platforms like Zillow.

Key Takeaways for Homeowners

Chapman reiterated that the determination of coverage is based on replacement costs rather than the purchase price of the property. This means a property valued at $2 million may only be insured for $1.2 million if that’s the estimated cost for rebuilding, regardless of the outstanding mortgage amount.

To ensure protection, a pre-hurricane season insurance evaluation is advisable. It’s crucial to recognize that flood insurance generally comes with a 30-day waiting period before coverage is enacted, making preemptive buying essential. Once a storm warning is issued, acquiring new policies or modifying existing ones becomes nearly impossible.

The Case for Flood Insurance

Currently, only about 20% of Floridians carry flood insurance, compared to a mere 6% on the national level, even as Florida accounts for nearly half of all flood policies issued in the U.S.

Increasing flood insurance costs, often between 15% and 18%, are largely attributed to FEMA’s recent 2.0 risk rating system, which calculates premiums based on individual property values and associated flood risks.

For properties not classified as high-risk by FEMA, flood insurance typically remains optional, but the Insurance Information Institute advocates for its necessity, particularly in coastal counties due to the diverse types of flooding covered.

Even properties situated inland are not safe from flooding incidents, as demonstrated by severe flooding in Central Florida during past hurricane seasons.

Utilizing Private Flood Insurance

Florida boasts numerous private flood insurance companies that often offer better rates and higher coverage limits compared to national policies. Private plans typically include coverage for additional living expenses, which national flood insurance does not cover.

Ground Realities of Insurance

Tim Mitchell, owner of TOPCAT Property Restoration, has a unique perspective shaped by hands-on experience with clients recovering from hurricane-related damage. He frequently encounters situations where clients lack sufficient coverage or face hurdles when seeking payouts.

Mitchell emphasizes the importance of meticulous documentation and transparency during the claims process, advising consumers to maintain comprehensive inventories of their possessions, including photographs and purchase documentation.

Business Insurance Considerations

Business insurance operates similarly to homeowners’ policies, covering commercial properties and associated liabilities. However, flood coverage for businesses is often contingent on loan agreements.

Business income coverage is crucial for property owners, especially those with tenant leases, as it provides protection against revenue loss during renovations or reconstruction periods following damage.

In conclusion, while challenges remain in certain coastal regions, the overall outlook for Florida’s insurance market appears brighter. Insurers can now offer competitive rates due to a decrease in lawsuits, thanks to legislative reforms, and a stabilized reinsurance market. With this positive shift, consumers are encouraged to actively reassess their insurance needs to seize potential savings and enhanced coverage opportunities.

Understanding Insurance Premiums

Average insurance premiums in Florida vary significantly, with reports from the State Office of Insurance Regulation indicating rates from $2,064 in Sumter County to $9,058 in Monroe County. Lee County averages $2,519, while Charlotte and Collier counties are approximately $3,212 and $5,604, respectively. Palm Beach County averages $6,614, reflecting these variations.

Auto Insurance Considerations for Hurricane Season

In addition to property insurance, it is essential to review auto insurance coverage as vehicles can sustain significant damage during storms. Reports indicate over 100,000 vehicles were totaled in Southwest Florida due to Hurricane Ian’s flood impact.

Having comprehensive auto insurance is crucial, covering damages from non-collision events such as severe weather, theft, and vandalism.

© Copyright 2025 Florida Weekly. All rights reserved.