Will Florida’s Insurance Reform Bill Lower Home Insurance Rates?

By  //  July 24, 2023

In December of last year, the state of Florida passed Senate Bill 2A, a comprehensive insurance reform bill. Florida’s insurance market has been in trouble for years, in no small part due to the detrimental effects of the state’s previous insurance law.


Excessive lawsuits and fraud have been a plague on Florida’s insurance market, a situation Senate Bill 2A intends to address. The changes wrought by the bill could pave the way for lower home insurance rates in the Sunshine State.

Florida’s Troubled Insurance Market

The last few years have been particularly rough for the insurance market in Florida. Previous insurance laws have turned out to be disastrous for insurers.

First of all, there’s the One-Way Attorney Fee Provision, an aspect of Florida insurance law that allows policyholders to collect attorney fees from insurers when they win a related lawsuit. While this measure was intended to protect consumers, it created a costly side effect: it incentivized “overzealous litigation.” leading to Florida accounting for a whopping 80% of the nation’s homeowners insurance lawsuits — but only 9% of its home insurance claims. Those bigger payouts were passed right back to the policyholders in the form of higher premiums.

The recent upsurge in climate disasters has also hit the state hard. Florida is already prone to things like hurricanes, floods, sinkholes, and extreme weather events, and those disasters can rack up billions of dollars in home insurance claims.

This has led to two years of the insurance industry underwriting losses of more than $1 billion. Several insurers have become insolvent or left the state, which has made it harder for homeowners to find affordable insurance that will cover their property.

Even those who can get homeowners insurance might find it difficult to afford or keep — according to Ross Martin at insurance comparison site The Zebra, Floridans pay 5% more than the average for their homeowners insurance, and it’s more than possible your policy could get canceled if your insurer falls victim to the ongoing home insurance crisis.

The Citizens Property Insurance Program

In an attempt to mitigate the financial damage caused by this excessive litigation and keep home insurance affordable for Florida citizens, the state introduced the Citizen’s Property Insurance Program. The program provides insurance (run by the state) at a higher rate than private insurers, and was intended as a safety net for homeowners who might otherwise go uninsured. Unfortunately, the capacity of the program is limited, and the higher premiums have proven to be a less than sustainable solution to the ongoing problem.

Senate Bill 2A

So what exactly does Senate Bill 2A do for Florida homeowners? Will it fulfill its goal of revitalizing the state’s insurance market?

First and perhaps most importantly, the bill eliminates one-way attorney fees for property insurance claims. Insurers will no longer be required to pay the attorney fees of policyholders who sue over claims. This should drastically reduce the number of frivolous insurance lawsuits plaguing the state.

Secondly, the bill will eliminate the practice of AOBS, or “assignment of benefits,” which are agreements wherein property owners sign over their claims to contractors, who then work with the insurance companies. While intended to help shield consumers, this practice has turned out to be a means of enabling fraud as contractors conduct unnecessary and expensive work, then file lawsuits against the insurance companies when they deny the claims.

The bill also introduces the Florida Optional Reinsurance Assistance (FORA) program. This program allows insurance companies to purchase additional protection for their policies in cases of major disasters like hurricanes or wildfires. This adds a safety net for insurers and policyholders alike, as the additional coverage will help avoid delays in claims payouts after a natural disaster.

Senate Bill 2A takes additional steps to speed up the claims and payout/rejection processes. Insurers now have 30 days, down from 45, to complete inspections before paying out or denying claims — no doubt a major relief for homeowners trying to rebuild their lives in the wake of disaster.

The new law also aims to get more Floridians out of the Citizens Property Insurance Program, acknowledging it as an unviable solution. The bill creates incentives for private insurers to provide competitive rates and loosens eligibility requirements for certain kinds of insurance. This will help Floridians afford home insurance without using the Citizens Property Insurance system, which will likely be shuttered in the future.

Other Ways to Lower Your Homeowners Insurance Premium

Senate Bill 2A promises to make life much easier for both insurers and homeowners — but there are additional steps homeowners can take to bring their premiums down, including:

  • Installing home security systems to lower the risk of burglary.
  • Reinforcing against extreme weather events with storm windows and doors or fire resistant materials.
  • Bundling home and auto insurance together to qualify for a discount.
  • Shopping around to compare rates and find cheap home insurance in Florida using free online tools.
  • Improving credit score (or maintaining a good one).