Florida's property insurance overhaul doesn't promise 'immediate relief'

Florida Gov. Ron DeSantis on Dec. 16 signed a sprawling bill to overhaul the state's property insurance market. Democrats said it didn't relieve the financial burden on homeowners. 

The state's residents are already on the hook for some of the highest property insurance rates in the U.S. Florida homeowners face annual premiums averaging $4,231, the Insurance Information Institute reported in August. 

DeSantis called for a special legislative session to remedy Florida's insurance market woes. Republicans, who hold supermajorities in both chambers of the Legislature, dominated the direction of insurance reform. The governor warned such relief would not be instantaneous. 

"The issues in Florida's property insurance market did not occur overnight, and they will not be solved overnight," DeSantis said in a Dec. 16 press release. "The historic reforms signed today create an environment which realigns Florida to best practices across the nation, adding much-needed stability to Florida's market."

Meanwhile, Democratic state Rep. Rita Harris of Orlando criticized the law as deficient.

"I was looking forward to working together with my colleagues across the aisle to find a solution that would provide immediate relief," Harris said in a Dec. 14 statement. "SB 2A does not provide that relief, and in fact, instead of reducing costs, it will force some of my constituents to pay up to 20% more for their property insurance."

Will Florida's insurance reform hike costs for some of the state's homeowners, as Harris suggested? Experts told PolitiFact that Harris' statement is accurate, but clarified that the law was designed to address a broader set of issues affecting the market. 

Mark Friedlander, a spokesperson for the nonpartisan Insurance Information Institute based in New York City, said Florida's SB 2A is not intended to lower premiums for homeowners immediately; it's to "lay the groundwork" for a stable market. 

"We do not expect to see immediate relief for consumers, but the eventual goal is to moderate premium increases," Friedlander told PolitiFact. "Most likely Floridians are going to see higher cost of insurance next year" because of existing issues in the market, including outstanding lawsuits against insurers. 

When we asked Harris about the 20% figure, she cited provisions in the bill centered on the "depopulation" of the state-run insurer, Citizens Property Insurance Corporation.

Florida lawmakers created Citizens in 2002 as an insurer of last resort — a backstop when residents can't find coverage in the private market. However, against the backdrop of devastating hurricanes, aggressive litigation and insurers leaving Florida, the state-run insurer is now a major competitor in the market. 

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In 2019, when DeSantis took office, Citizens had 425,000 policies. Enrollment in Citizens topped 1 million in 2022, and Citizens is now Florida's largest property insurer. 

To drive consumers back into the private homeowners insurance market, the law will not allow homeowners to renew their coverage with Citizens if they receive an offer from a private insurer that is no more than 20% more expensive than their current policy. 

The law also mandates homeowners purchase flood insurance as "a condition of eligibility for Citizens coverage." That requirement alone will make keeping such policies costlier. 

"The bill has many provisions that allow for further increases in consumer premiums," said Zac Taylor, a professor at Delft University of Technology in the Netherlands, who studies climate risk and the insurance sector.

Policyholders outside of Citizens will not be impacted by the flood insurance mandate.

Asked about Harris' claim, the governor's press secretary Bryan Griffin said the legislation will encourage "competition among insurers which will ultimately lower rates for Florida's homeowners."

Patricia Born, a professor at the Florida State University's risk management program, said the state's insurance reform won't bring immediate rate reductions, but it aims to address market conditions that drive those rates. 

"This act does not save money for homeowners," Born told PolitiFact. "We need to prop up the insurance market, and once we get some of the issues they're dealing with under control, then we might see rates stabilizing or coming down." 

Harris said Florida's SB 2A will not provide immediate "relief" and will force some homeowners to "pay up to 20% more for their property insurance."

A provision of the law will not allow homeowners to renew their public insurance policies if they are enrolled with the state-run insurer and receive an offer from a private insurer that is no more than 20% more expensive.

But experts told PolitiFact the legislation was designed to address broader market conditions with the long-term goal of moderating premiums.  

Harris' claim is accurate but needs clarification. We rate it Mostly True.