Will Florida Roll Back Insurer-friendly Litigation Rules? | Insurify

Florida legislators passed laws to reduce runaway home insurance costs a few years ago. But with four new bills at the state House that could undo those laws, Florida leaders can't seem to agree on the right way to lower Florida home insurance premiums.

Supporters lobbying for the 2022–2023 laws aimed at reducing insurance lawsuits argued that they improve struggling insurance markets and stabilize or reduce premiums. Others aren't so sure. State Sen. Don Gaetz (R-District 1), who recently introduced a bill that would reinstate attorney fee awards, said his goal was also to lower insurance costs.

"There is no silver bullet that will automatically drive down property insurance costs," Gaetz wrote in a news release. "But we need to do more than reduce litigation."

The bills on the table

The handful of laws the legislature passed in 2022 and 2023 allowed insurers to begin recovering legal fees when a homeowner sued them over a property insurance claim. Previous law allowed only the plaintiff's attorney to recover legal fees, according to the Insurance Information Institute (Triple-I).

Legislators filed four new bills in February that would roll back some key reforms from 2022 and 2023. Each bill must go before several committees for review in the 2025–2026 legislative session. If legislators move quickly, the laws could take effect as soon as this summer, but the differing opinions mean things might move slower than that.

Here's a quick overview of the proposed laws.

Gaetz introduced SB 554, which reinstates plaintiff attorney fee awards on a sliding scale based on the pre-suit settlement demand and judgment.State Sen. Jonathan Martin (R-District 33) introduced SB 1520, which tweaks a 2023 law to allow the inclusion of evidence demonstrating the actual value of medical services and future medical expenses in personal injury lawsuits.Martin also introduced SB 1840, which amends Florida law to reinstate attorney fee awards in auto insurance personal injury cases.Martin and State Sen. Daryll Rouson (D-District 16) co-introduced SB 426, which reinstates attorney fees for property insurance lawsuits, which Florida eliminated in 2022.

Supporters say tort reform improves the insurance market

Attorney fees are essentially "litigation incentives," and this "new legislation would reduce or even reverse" the progress Florida has already made, Triple-I wrote in a recent blog post.

Triple-I and other advocates for legislation targeting legal system abuse — also called tort reform — maintain that it will help reduce insurer costs, stabilize local markets, and promote competition. Triple-I claims the 2022–2023 Florida reforms are already doing just that.

In 2022, Florida had nearly 71% of the nation's homeowners claim-related lawsuits despite having just 15% of homeowners claims overall, according to the state Office of Insurance Regulation.

The post-reform market has seen insurers return to the Sunshine State, and others are expanding coverage. Forty percent of the national insurers writing home coverage in Florida sought a rate decrease in 2024, Florida Insurance Commissioner Michael Yaworsky told Triple-I.

In the last quarter of 2024, Florida reported a cumulative home premium decrease for the first time in nearly a decade, Triple-I Senior Director of Media Relations Mark Friedlander told Insurify.

"Tort reform in Florida has reduced new lawsuit filings year-over-year by approximately 40%," he said. "As a result, insurer legal defense cost containment has declined."

Average annual home insurance premiums have decreased in Florida, according to Insurify data. At the start of 2024, Insurify projected a 6.5% increase in the average yearly cost of home insurance to $11,759 for $300,000 of coverage, just slightly above Insurify's projected national increase of 6%, according to Insurify's home insurance report. Current Insurify data shows rates instead decreased by about 3% to $10,675.

Opponents argue limiting lawsuits won't help consumers

Supporters say the law aims to prevent inflated claims while protecting the rights of injured parties. But opponents argue it reduces transparency. The Center for Justice & Democracy at New York Law School, an organization dedicated to protecting the civil justice system, claims this legislation doesn't reduce premiums and can even prevent valid lawsuits from wronged citizens.

The center writes that lawsuits against insurance companies aren't frivolous and that policyholders must sue insurers if they don't pay legitimate claims. The organization also lists raising awareness of "the dangerous campaign behind the so-called 'tort reform' movement" as one of its main aims.

After Florida passed its tort reform legislation in 2023, the Florida Justice Association (FJA) expressed dismay and concern for Floridians' civil rights.

"In just three short weeks, Florida lawmakers rushed through some of the largest rights-grabbing legislation in recent history," former FJA President Curry Pajcic wrote in a press release. "This bill significantly limits the ability of Floridians to hold wrongdoers accountable and effectively gives Big Insurance the keys to our state and our court process."

What's next: Eyes on Georgia

As Florida's proposed legislation moves forward, neighboring Georgia offers insight into the debates ahead.

Georgia lawmakers recently passed sweeping tort reform legislation. One part bans "hostile foreign adversaries" from Georgia's courts and protects consumers from predatory lenders in an effort to bring transparency to third-party litigation funding, according to a release from the Georgia governor's office. Another part closes a loophole that allowed plaintiff attorneys to recover fees twice for the same suit.

Part of Georgia's Senate Bill 68 seems to go further than Florida's current reforms and drew the most uproar. Article 5 of the bill changes the law to hold business and property owners liable only for failures to keep their property safe that they could reasonably foresee. Some spoke out, saying this will prevent valid lawsuits, including from victims of violence and sexual abuse.

"The court should be a safe, welcoming place for all of us, and we just picked and chose losers today — those that will get access and those that will not," lawyer and Georgia State Rep. Stacey Evans told the Insurance Journal.

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