Florida Senate RejectsLegal-Reform Challenge

By Lewis Nibbelin, Contributing Writer, Triple-I

The Florida House’s attempt to curtail recent legal system reforms met firm resistance from the state Senate this week, preserving the 2022 and 2023 legislation that stabilized the state’s property insurance market.

Aiming to reinstate one-way attorney fees in insurance litigation, the House added an amendment – originally part of a separate bill – to an unrelated Senate bill focused on creating legal protections for owners of former mining sites.

Filed by state Rep. Berny Jacques, the amendment would have restored Florida’s previous requirement for insurers to shoulder the insured’s legal costs, even if the insured’s jury award was only slightly higher than the settlement insurers offered. Current law stipulates that each side is responsible for their own fees.

Senate members refused to concur with the proposal and sent the bill back to the House, which can either remove Jacques’ amendment or let the entire bill die.

Insurers and policyholders benefit

Jacques’ amendment prompted instant criticism from industry leaders, notably Florida Insurance Commissioner Michael Yaworsky, who sent an email warning the governor’s legislative affairs director that it would dismantle “hard-won progress” achieved by the 2022-2023 reforms, according to a report by the South Florida Sun Sentinel.

That progress includes the introduction of 12 new insurers into Florida’s property sector after a multi-year exodus and a 23 percent decrease in lawsuit filings year over year, Yaworsky wrote.

Proponents of Jacques’ amendment argued it would return balance to the legal system, which had overcorrected to favor insurance companies at the expense of consumers.

Yet, in 2019, Florida accounted for just over 8 percent of U.S. homeowners insurance claims, but more than 76 percent of U.S. property claim lawsuits, pushing premium rates up to three times the national average. Post-reform, in 2024, 40 percent of all insurers in the state filed for rate decreases, with average home insurance premiums down 5.6 percent at the start of this year.

Reversing these reforms would reinvigorate fraudulent and unnecessary lawsuits, increasing insurer costs and, consequently, premium rates. Dulce Suarez-Resnick, an insurance agent based in Miami, told the Sun Sentinel that supporters predicted reforms wouldn’t be felt for three years.

“We are two years in, and I’ve already seen a lot of impact,” Suarez-Resnick said. “The Legislature needs to be patient. We have one more year to go.”

Reforms expected to remain intact

Though Florida’s 2025 legislative session was extended, the House has little time to push for further changes to the reforms. Even if the Senate somehow acquiesces and passes the amended bill, it is unlikely to survive – Gov. Ron DeSantis has vowed to veto any bill targeting tort reform and publicly condemned the House’s efforts to roll it back.

And Florida isn’t alone: Georgia successfully passed its own comprehensive tort reform package last month, after plaintiffs’ attorneys began transferring their marketing tactics to the neighboring state. State government moves like these are essential to eradicating legal system abuse and protecting all stakeholders from rising costs.

Learn More:

What Florida’s Misguided Investigation Means for Georgia Tort Reform

Florida Bills Would Reverse Progress on Costly Legal System Abuse

Florida Reforms Bear Fruit as Premium Rates Stabilize 

Georgia Targets Legal System Abuse

How Georgia Might Learn From Florida Reforms

Louisiana Reforms: Progress, But More Is Needed to Stem Legal System Abuse

Resilience Investments Paid Off in Florida During Hurricane Milton

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Recent tariffs issued by U.S. President Donald Trump are on track to increase the price of parts and materials used in repairing and restoring property after an insurable event. Analysts and economists, predict these price hikes will lead to higher claim payouts for P&C insurers and, ultimately, higher premiums for policyholders. 

After making several announcements since early March 2025, on April 2, President Trump signed an executive order imposing a minimum 10 percent tariff on all U.S. imports, with higher levies on imports from 57 specific trading partners. A general tariff rate became effective on April 5, while tariffs on imports from the targeted nations, ranging from 11 to 50 percent, took effect on April 9. A 25 percent tariff applies to all steel and aluminum imports and cars. President Trump says he might consider a one-month exemption to the auto industry, but as of this writing, no changes have been issued. 

Generally, tariffs can bring in revenue for the issuing government but lower the operating margin for impacted domestic businesses. Inventory and supply chain managers may attempt to stockpile in advance of the new rates becoming effective, which in turn can spike demand and quickly spike prices for sought-after items. Eventually, these cost hikes get passed on to consumers.  

Nonetheless, to ride out the situation, inventory and supply chain managers need a fundamental level of predictability regarding what the levies will cover, what the rates are, and when these rates go into effect. The timing and scope of President Trump’s tariff policies have been challenging to nail down, including for many goods particularly relevant to construction and auto manufacturing. For example, his initially declared rates for major trading partners – Canada, Mexico, the European Union, and China – have fluctuated as these nations announced reciprocal tariffs, and those levies, in turn, were met with higher US rates. 

Then, on April 9, President Trump declared a 90-day pause on tariffs. This change was actually not a true pause but a reduction of previous rates for several countries to 10 percent, except for China. The White House has declared on April 10 that the previously announced 125 percent rate against goods from China is actually now 145 percent. 

According to S&P, the levy on auto industry imports has been comparatively less dynamic as, despite confusing announcements from the White House, there has been no change to President Trump’s 25 percent rate declared on March 26, “which applies to all light-vehicle imports, regardless of country. The 25 percent tariff includes auto parts as well as completely built up (CBU) vehicles. The CBU autos tariff went into effect on April 3, 2025, while the auto parts portion is due to come into effect on May 3, 2025.” 

As insurers grapple with risk management and inflationary pressures, other challenges posed by the tariffs can include issues for policyholders, specifically coverage affordability and availability. One downstream side effect may be the increased risk of expanding the protection gap – uninsurance and underinsurance (UM/UIM) due to higher premiums and higher valuations that can come into play when materials costs rise. Across the fifty states and the District of Columbia, one in three drivers (33.4 percent) were either uninsured or underinsured in 2023, according to a recent report, Uninsured and Underinsured Motorists: 2017–2023, by the Insurance Research Council (IRC), affiliated with The Institutes. 

Our Chief Economist and Data Scientist, Dr. Michel Léonard, shares his analysis of how the tariffs may impact the P&C Insurance industry.  

“There’s no crystal ball”, say Dr. Léonard, “but prudent risk underwriting and risk management suggests the use of scenarios and increased price ranges for different tariff levels, the more precise impact of which can be updated based on actual price increases for individual prices.”  

Dr. Léonard outlines three types of P&C replacement cost scenarios given different tariff ranges: 

1) For single-digit tariffs, while inventories last, higher prices below that tariff’s rate;  

2) for single-digit tariffs on goods still economically viable post-tariffs, higher prices up to the tariff’s rate; and  

3) for single and double-digit tariffs on goods no longer economically viable, a multiple of the pre-tariff price for tariff-evading goods.  

His presentation, Tariffs and Insurance: Economic Insights can be previewed, but the full version is currently available exclusively to Triple-I members.  

Triple-I remains committed to keeping abreast of these and other developments crucial to the insurance industry’s future. For more information, we invite you to stay tuned to our blog and join us at JIF 2025. 

Despite Progress, California Insurance Market Faces Headwinds

Even as California moves to address regulatory obstacles to fair, actuarially sound insurance underwriting and pricing, the state’s risk profile continues to evolve in ways that impede progress, according to the most recent Triple-I Issues Brief.

Like many states, California has suffered greatly from climate-related natural catastrophe losses. Like some disaster-prone states, it also has experienced a decline in insurers’ appetite for covering its property/casualty risks.

But much of California’s problem is driven by regulators’ application of Proposition 103 – a decades-old measure that constrains insurers’ ability to profitably write business in the state. As applied, Proposition 103 has:

• Kept insurers from pricing catastrophe risk prospectively using models, requiring them to price based on historical data alone;
• Barred insurers from incorporating reinsurance costs into pricing; and
• Allowed consumer advocacy groups to intervene in the rate-approval process, making it hard for insurers to respond quickly to changing market conditions and driving up administration costs.

As insurers have adjusted their risk appetite to reflect these constraints, more property owners have been pushed into the California FAIR plan – the state’s property insurer of last resort.  As of December 2024, the FAIR plan’s exposure was $529 billion – a 15 percent increase since September 2024 (the prior fiscal year end) and a 217 percent increase since fiscal year end 2021. In 2025, that exposure will increase further as FAIR begins offering higher commercial coverage for larger homeowners, condominium associations, homebuilders and other businesses.

Insurance Commissioner Ricardo Lara has implemented a Sustainable Insurance Strategy to alleviate these pressures. The strategy has generated positive impacts, but it continues to meet resistance from legislators and consumer groups. And, regardless of what regulators or legislators do, California homeowners’ insurance premiums will need to rise.

The Triple-I brief points out that – despite the Golden State’s many challenges – its homeowners actually enjoy below-average home and auto insurance rates as a percentage of median income. Insurance availability ultimately depends on insurers being able to charge rates that adequately reflect the full impact of increasing climate risk in the state. In a disaster-prone state like California, these artificially low premium rates are not sustainable.

“Higher rates and reduced regulatory restrictions will allow more carriers to expand their underwriting appetite, relieving the availability crisis and reliance on the FAIR plan,” said Triple-I Chief Insurance Officer Dale Porfilio.

With events like January’s devastating fires, frequent “atmospheric rivers” that bring floods and mudslides, and the ever-present threat of earthquakes – alongside the many more mundane perils California shares with its 49 sister states – premium rates that adequately reflect the full impact of these risks are essential to continued availability of private insurance.

Learn More:

California Insurance Market at a Critical Juncture

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

How Proposition 103 Worsens Risk Crisis in California

Even With Recent Rises, Auto Insurance Is More Affordable Than During Most of Century to Date

You read that right. As a percentage of median household income, personal auto insurance premiums nationally were more affordable in 2022 (the most recent data available) than they have been since the beginning of this century.

And even the premium increases of the past two years are only expected to bring affordability back into the 2000 range, according to the Insurance Research Council (IRC).

A new IRC report – Auto Insurance Affordability: Countrywide Trends and State Comparisons – looks at the average auto insurance expenditure as a percent of median income. The measure ranges from a low of 0.93 percent in North Dakota (the most affordable state for auto insurance) to a high of 2.67 percent in Louisiana (the least affordable).

The pain is real

This is not to downplay the pain being experienced by consumers – particularly those in areas where premium rates have been rising while household income has been flat to lower.  It’s just to provide perspective as to the diverse factors that come into play when discussing insurance affordability.

Between 2000 and 2022, median household income grew somewhat faster than auto insurance expenditures, causing the affordability index to decline from 1.64 percent in 2000 to 1.51 percent in 2022. In other words, auto insurance was somewhat more affordable in 2022 than in 2000.

“With the recent increases in insurance costs, affordability is projected to deteriorate in 2023 and 2024,” said Dale Porfilio, FCAS, MAAA, president of the IRC and chief insurance officer at Triple-I. “The affordability index is projected to increase to approximately 1.6 percent in 2023 and 1.7 percent in 2024, a significant increase from the low in 2021 but still below the peak of 1.9 percent in 2003.”

In other words, we’ve been here before; and, if risks and costs can be contained, so can premium growth in the long term.

Cost factors vary by state

Auto insurance affordability is largely determined by the key underlying cost drivers in each state. They include:

• Accident frequency
• Repair costs
• Claim severity
• Tendency to file injury claims
• Injury claim severity
• Expense index
• Uninsured and underinsured motorists
• Claim litigation.

These factors vary widely by state, and the IRC report looks at the profiles of each state to arrive at its affordability index.

Reducing risk and costs is key

Porfilio noted that “while state-level data cannot directly address affordability issues among traditionally underserved populations, collaborative efforts to reduce these key cost drivers can improve affordability for all consumers.”

Continued replacement-cost inflation is likely to maintain upward pressure on premium rates. Tariffs could exacerbate that trend, as well as hurting household income in areas dependent on industries likely to be affected by them.

At the same time, some states are working hard to ameliorate other factors hurting affordability.  Florida, for example, was the second least affordable state for auto insurance in 2022; however, the state has made recent progress to reduce legal system abuse, a major contributor to claims costs in the Sunshine State. In 2022 and 2023, Florida passed several key reforms that have led to significant decreases in lawsuits. As a result, insurers have been writing more business in the state after a multi-year exodus. This increased competition puts downward pressure on rates, which should be reflected in the IRC’s next affordability study.

Learn More:

IRC Report: Personal Auto Insurance State Regulation Systems

IRC Report: U.S. Consumers See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs

Florida Reforms Bear Fruit as Premium Rates Stabilize 

What Florida’s Misguided Investigation Means for Georgia Tort Reform

Florida Bills Would Reverse Progress on Costly Legal System Abuse

Inflation Continues to Drive Up Consumers’ Insurance Costs

Improved Commercial Auto Underwriting Profitability Expected After Years of Struggle

Louisiana Is Least Affordable State for Personal Auto Coverage Across the South and U.S.

Georgia Is Among the Least Affordable States for Auto Insurance

Report: No-Fault Reforms Improved Michigan’s Personal Auto Insurance Affordability

Auto Insurers’ Performance Improves, But Don’t Expect Rates to Flatten Soon

How Tariffs AffectP&C Insurance Prospects

Tariffs and threats of tariffs have been roiling financial markets since January. Property and casualty insurers are no less concerned, as the cost of repairing and replacing damaged property is a driver of claim costs and, ultimately, policyholder premiums.

Triple-I Chief Economist and Data Scientist Dr. Michel Léonard recently sat down to explain the implications of tariffs and trade barriers for insurers and what economic considerations concern industry decisionmakers.

While property and casualty insurers write many kinds of coverage, the lines Léonard primarily discussed were homeowners and personal and commercial auto – “lines that have a physical emphasis on repair, rebuild, and replace.”

Lumber from Canada; cars, trucks, and parts from Canada and Mexico; and garments, furnishings, and technology from Asia all come into play when considering the prospective impacts of tariffs on replacement costs, Léonard said.

“When we’re focusing specifically on China,” he said, “we’re looking primarily at farm equipment and alternative-energy components.”

Uncertainty around tariffs – particularly in recent weeks, as tariffs on Mexico and Canada have been imposed and “paused” – makes analysis even more difficult.

“Much depends on how much clarity there is, how much communication from the policymakers, from the administration and from the legislature,” Léonard said. It’s also important to remember that impacts can last well beyond their implementation and withdrawal.

During the first Trump Administration, tariffs on soft commodities, beef, grain, and so forth had impacts for several years afterwards.

“Those tariffs were fairly short lived,” Léonard said, “but for two to three years afterward farmers were uncomfortable investing in equipment at the same pace, and that reduced farmowners’ insurance growth.”

Regardless of how the current discussions around tariffs play out, the Trump Administration has signaled a decided shift in policy toward greater protectionism. As a result, Léonard said, “We should expect a repositioning in our understanding of our replacement costs and underlying growth forecast for the next 12 months, at a minimum.”

He projects a period of “most likely 24 to 36 months” in which growth will be slower and inflation – including replacement costs for the P&C industry – will be higher.

Learn More:

Tariffs and Insurance – full video (Members Only)

Insurance Economic Outlook (Members Only)

Florida ReformsBear Fruit as Premium Rates Stabilize 

Florida’s legislative reforms to address claim fraud and legal system abuse are stabilizing the state’s property/casualty insurance market, according to the latest Triple-I Issues Brief.  

Claims-related litigation has significantly declined over the past two years, and premium averages are nearly flat, with several insurers requesting rate decreases from the state’s insurance regulator.  In addition, the brief says, the number of insurers writing business in the state has rebounded after a multi-year exodus. This competition from the private market has allowed policyholders to leave Citizens Property Insurance Corp. – the state-run insurer of last resort – to obtain coverage at previously unavailable rates from a much healthier private market. 

According to the state’s Office of Insurance Regulation (OIR), Florida in 2022 accounted for nearly 71 percent of the nation’s homeowners claim-related litigation, despite representing only 15 percent of homeowners insurance claims. The same year – before Hurricane Ian made landfall in Florida – six insurers in the state declared insolvency, primarily due to economic pressures from legal system abuse. Based on insured losses, Ian became the second-most costly U.S. hurricane on record, due in large part to extraordinary litigation costs for disputed claims. 

The Legislature responded to the growing crisis by passing several pieces of insurance reform that, among other things, eliminated one-way attorney fees and assignment of benefits (AOB) for property insurance claims and prohibited misleading legal service ads and the misuse of consumer health information for legal services. 

Premium rate growth slowing 

The impact of the 2022 and 2023 reforms can be seen in premium rate changes, particularly with respect to homeowners insurance. Homeowners rates in Florida grew at a much slower rate in 2024, even as rate growth remained strong nationally. Growth in personal auto insurance premium rates in Florida has slowed since the repeal of AOB and one-way attorney fees, but the trend also is consistent with nationwide experience. 

“There are a lot of factors involved in insurance rates, and Florida’s property and auto markets are challenging,” Florida Governor Ron DeSantis said in February, “but…data suggests that, in 2024, Florida had the lowest average homeowners’ premium increases in the nation, and the overall market has stabilized, with 11 new companies having entered the market over the past two years.” 

Among the top 10 national insurers writing homeowners insurance in Florida, 60 percent have expanded their business over the past year, and 40 percent of all insurers operating in the state filed for rate decreases in 2024, according to Florida Insurance Commissioner Michael Yaworksy. 

The cost of reinsurance also continues to decrease for Florida carriers. 

“In 2024, most companies paid less for reinsurance than they did in 2023,” according to the OIR website. “The average risk-adjusted cost for 2024 was -0.7 percent, a large reduction from last year’s change of 27 percent increase from the prior year.” 

Reinsurance costs are factored into premium rates, so this is another reason Florida now has the lowest average rate filings in the United States in 2024, according to S&P Global Marketplace. 

Learn More: 

Florida’s Progress in Legal Reform: A Model for 2025 

How Georgia Might Learn From Florida Reforms 

Resilience Investments Paid Off in Florida During Hurricane Milton 

Florida Homeowners Premium Growth Slows as Reforms Take Hold, Inflation Cools