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The Potential Future of Property Insurance in Florida in 2025

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Property Insurance in Florida in 2025
Property Insurance in Florida in 2025

Florida’s property insurance market has faced unprecedented challenges over the last few years, largely due to hurricanes, inflation, and high rebuilding costs. With Hurricanes Milton and Helene in 2024 leaving thousands of Floridians with water and wind damage, many homeowners are now grappling with higher insurance premiums and difficulties finding coverage.


As the 2025 legislative session approaches, property insurance reform is expected to be a major topic of discussion. Experts like former state senator Jeff Brandis, now president of the Florida Policy Project, have shared their insights on how reforms may shape the future of property insurance in the state. Here's a breakdown of the key issues and potential changes to watch for in 2025.


1. Stabilization of Property Insurance in Florida in 2025 Rates


According to Brandis, while property insurance rates may stabilize, homeowners shouldn’t expect dramatic decreases anytime soon. Inflation has driven up the cost of building materials and labor, making it more expensive to rebuild homes after disasters. These higher costs are factored into insurance premiums.

However, there is a silver lining. The reinsurance market—the insurers that provide financial backing to insurance companies—has shown signs of price stabilization. This could help slow the rise of premiums in the long term.


What this means for homeowners:

  • Premiums may not increase as rapidly as they have in recent years.

  • New market entrants and reinsurance cost reductions could eventually lead to modest rate decreases.


2. Citizens Property Insurance Under Scrutiny


One of the most pressing issues in Florida’s property insurance market is Citizens Property Insurance, the state-run insurer of last resort. Citizens currently carries $500 billion in risk but holds less than $10 billion in reserves. This poses a potential financial threat to the state and its taxpayers in the event of a catastrophic hurricane season.


Reforms to Expect:

  • Reducing Citizens' Policy Count: Citizens has been pushing policyholders into private insurers. If a private insurer offers coverage at a rate within 20% of Citizens' premium, the policy is transferred.

  • Liability Reduction: Lawmakers are expected to focus on shrinking Citizens' liability to prevent the risk of insolvency.


Why This Matters: A more stable and efficient Citizens Property Insurance program could reduce the burden on Florida taxpayers. Homeowners, however, may face higher premiums when transferred to private insurers.


3. New Insurance Companies and Market Expansion


Florida’s insurance market has seen a mix of new and existing companies entering the scene, but true market growth will depend on the introduction of new capital. Without more insurers offering policies, competition remains limited, keeping rates high.


According to Brandis, 40% of insurance premiums in Florida are sent to offshore reinsurers. Reinsurance costs directly affect premium rates, but recent trends show softening prices in the reinsurance market, which may eventually provide relief.


What to Watch For:

  • New insurance companies entering the Florida market.

  • Legislative efforts to attract and retain insurers with favorable policies and capital incentives.


4. Challenges for Homeowners


Many homeowners feel caught in a cycle of uncertainty as they’re transferred between insurers. It’s not uncommon for policyholders to be dropped by one company, forced into Citizens, and then transferred to another private insurer offering higher premiums.


Tips for Homeowners:

  • Shop Around: Always compare policies from multiple insurers to find the best coverage and rates.

  • Understand Policy Terms: Policies from Citizens may be more basic, but some private insurers offer better terms at competitive rates.

  • Work with an Insurance Professional: A public adjuster can help ensure you get fair coverage and compensation in case of a claim.


5. Legislative Priorities for 2025


Property insurance reform is expected to be a key focus in the upcoming legislative session. Here are some of the priorities experts believe lawmakers should address:


Citizens Property Insurance Reform

  • Reducing the number of policies under Citizens.

  • Strengthening financial reserves to handle large-scale disasters.


Incentivizing New Insurance Companies

  • Encouraging more market entrants to increase competition.

  • Addressing regulatory hurdles that may deter new insurers from doing business in Florida.


Consumer Protections

  • Implementing clearer guidelines on policy transfers and coverage changes.

  • Protecting homeowners from predatory practices and ensuring fair access to affordable coverage.


6. Affordability and Housing Supply Concerns


Beyond property insurance, affordability in Florida is becoming a critical issue. Rising housing costs, combined with increasing insurance premiums, make it difficult for both existing homeowners and prospective buyers to afford living in the state.

Incoming House Speaker Daniel Perez has expressed concerns about losing the next generation of talent to other states due to high costs. Experts argue that Florida needs a comprehensive statewide housing plan to address both housing supply and insurance affordability.


Potential Solutions:

  • Expanding the housing supply through zoning reforms and reduced building restrictions.

  • Promoting "live local" initiatives to create affordable housing near job centers.

  • Stabilizing insurance premiums to make homeownership more affordable for young professionals and families.


7. Long-Term Outlook for Florida's Insurance Market

Brandis compares Florida's property insurance market to a patient recovering from major surgery. After years of instability and legislative reforms, the market is beginning to show signs of recovery. However, experts caution against drastic new interventions that could disrupt this progress.


What This Means for the Future:

  • Expect continued efforts to improve Citizens Property Insurance and attract new insurers.

  • Gradual improvements in affordability and competition may reduce premium increases over time.

  • Homeowners should stay informed about policy changes and shop around to find the best coverage options.


FAQs About Property Insurance in Florida in 2025


1. Will property insurance rates decrease in 2025? Rates may stabilize, but significant decreases are unlikely due to inflation and high rebuilding costs.


2. What is Citizens Property Insurance? Citizens is Florida’s state-run insurer of last resort, designed to provide coverage when private insurers are unavailable.


3. How can I lower my property insurance premiums?

  • Improve your home’s hurricane resilience (e.g., impact windows, roof reinforcements).

  • Shop around for policies with better terms and rates.

  • Work with a public adjuster to ensure fair treatment during claims.


4. Why are so many Floridians being transferred between insurance companies? Policyholders are being moved from Citizens to private insurers under laws designed to reduce Citizens' liability.




Final Thoughts: Navigating the Future of Property Insurance in Florida

The future of property insurance in Florida in 2025 hinges on continued reform and market expansion. While stabilization efforts are underway, homeowners should remain proactive by understanding their policies, shopping for better coverage, and seeking expert advice when necessary.


For help with claims and insurance issues, Base Claims Public Adjusters is here to guide you every step of the way.


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