If you’re a Florida homeowner, you’ve likely experienced the gut-wrenching moment of opening your insurance renewal notice only to find your premiums have skyrocketed or worse, your policy has been non-renewed entirely. You’re not alone. Florida homeowners are paying three times the national average for home insurance, and the situation continues to deteriorate.
Insurance companies point fingers at one culprit: litigation. But is excessive litigation truly the root cause of Florida’s insurance crisis, or are insurers using it as a convenient scapegoat to justify rate increases and pad their bottom lines?
As a law firm that has witnessed both sides of this battle, Williams Law Association, P.A. breaks down the complex reality behind Florida’s home insurance catastrophe.
The Staggering Numbers Behind Florida’s Insurance Crisis
The statistics are alarming. Florida homeowners now pay an average of $6,000 to $11,000 annually for home insurance rates that have doubled or tripled in just a few years. Meanwhile, multiple insurance carriers have either gone insolvent, stopped writing new policies, or fled the state entirely.
Since 2020, more than a dozen insurance companies have become insolvent in Florida, leaving hundreds of thousands of policyholders scrambling. Citizens Property Insurance Corporation, the state-backed insurer of last resort, has swelled to over 1.2 million policies far beyond its intended capacity.
The question remains: what’s really driving this crisis?
The Insurance Industry’s Argument: Litigation Is Killing Us
Insurance companies have a straightforward narrative: Florida’s litigation environment is uniquely toxic, and lawsuit abuse is bankrupting carriers.
Their Key Claims:
- Excessive Attorney Fees: Florida’s one-way attorney fee statute allows policyholders who win disputes to recover legal fees from insurers. Companies claim this incentivizes frivolous lawsuits and inflates claim costs.
- Assignment of Benefits (AOB) Abuse: Contractors and restoration companies allegedly exploited AOB agreements by filing inflated claims and initiating litigation on behalf of homeowners, leading to thousands of lawsuits over relatively minor damages.
- Lawsuit Volume: Florida accounts for roughly 8% of homeowners’ insurance claims nationally but represents nearly 80% of all homeowners’ insurance lawsuits in the country, a disparity insurers call unsustainable.
- Roofing Scams: Unscrupulous contractors allegedly solicited homeowners door-to-door, promising “free roofs” and filing inflated insurance claims that led to costly litigation.
On the surface, these arguments seem compelling. But the reality is far more nuanced.
The Counterargument: Are Insurers Playing Victim?
Consumer advocates, policyholders, and attorneys who represent homeowners tell a dramatically different story, one where insurance companies are not innocent victims but active participants in creating the crisis.
The Other Side of the Story:
- Systematic Claim Denials: Many homeowners report that legitimate claims are routinely underpaid or denied, forcing them to hire attorneys to get what they’re owed. When insurers deny valid hurricane damage claims or lowball settlements, litigation becomes the only recourse.
- Bad Faith Practices: Some insurers have been accused of employing tactics designed to wear down policyholders, delaying investigations, demanding excessive documentation, or offering settlements that don’t cover actual damages. When companies refuse to honor their policy obligations, lawsuits aren’t “frivolous”; they’re necessary.
- Profitability Questions: While claiming financial distress, some major insurers have reported record profits nationwide. Critics question whether carriers are truly struggling or simply exiting Florida because they can make easier money in other states.
- Reinsurance Cost Shifting: Insurance companies blame reinsurance costs (the insurance that insurers buy to protect themselves), but some analysts suggest carriers could be inflating these expenses or using reinsurance costs as cover for other business decisions.
- Legislative Victories Didn’t Help: Florida passed major insurance reforms in 2022 and 2023 that significantly restricted homeowner lawsuits and eliminated one-way attorney fees for most claims. Despite these industry-friendly changes, rates continue to climb, suggesting litigation wasn’t the primary problem.
What Recent Legislative Reforms Reveal
Florida lawmakers have sided heavily with the insurance industry in recent years, passing sweeping reforms that restricted homeowner rights:
- Eliminated one-way attorney fees for most property claims
- Shortened the statute of limitations for filing claims
- Restricted Assignment of Benefits practices
- Limited roof claim payments based on the age of the roof
- Made it harder to sue insurers for bad faith practices
If litigation were truly the driving force behind high rates, these reforms should have stabilized the market. Instead, rates continue to surge, and insurers keep leaving. This raises a critical question: if the litigation problem has been addressed, why are rates still climbing?
The Inconvenient Truth: Multiple Factors at Play
The honest answer is that Florida’s insurance crisis stems from multiple converging factors, and litigation is only one piece of a much larger puzzle:
- Climate Change and Hurricane Risk: Florida faces increasing hurricane frequency and intensity, leading to genuine increases in catastrophic risk and claims payouts.
- Construction Costs: Post-pandemic inflation has driven building material and labor costs through the roof, making repairs and replacements far more expensive.
- Reinsurance Market Hardening: Global reinsurance markets have pulled back from Florida exposure, driving up costs for primary insurers.
- Poor Regulatory Oversight: Some argue that Florida’s insurance regulations have allowed poorly capitalized companies to enter the market, only to fail when major storms hit.
- Fraud Does Exist: While not as widespread as insurers claim, there are documented cases of contractor fraud and inflated claims that do cost the system money.
- Profit Motives: Insurance is a business, and companies make calculated decisions about risk, profitability, and market conditions that aren’t always aligned with consumer interests.
What This Means for Florida Homeowners
The litigation versus excuse debate isn’t just academic; it has real implications for your rights and wallet:
- If Insurers Are Right: Then recent reforms should eventually stabilize rates, and homeowners who genuinely need legal help may find it harder to find representation.
- If Insurers Are Wrong: Then you’re paying inflated premiums while having fewer legal protections when your legitimate claims are denied or underpaid.
The reality is likely somewhere in between, but one thing is sure: Florida homeowners are caught in the crossfire.
Your Rights as a Policyholder
Regardless of the political and economic forces at play, Florida homeowners still have necessary rights:
- You have the right to file legitimate claims for covered losses
- You have the right to dispute unfair claim denials or lowball settlements
- You have the right to seek legal counsel when insurers act in bad faith
- You have the right to understand your policy and what’s covered
However, recent legislative changes have made it more challenging and expensive to pursue some of these rights.
When Should You Contact an Attorney?
While the legislative landscape has changed, there are still situations where legal representation is crucial:
- Your legitimate claim has been denied without proper justification
- Your insurer is significantly undervaluing your loss
- Your insurer is delaying your claim unreasonably
- You suspect your insurer is acting in bad faith
- Your home has significant damage, and the settlement won’t cover repairs
- Your insurer is using policy language to deny coverage you believe you have
The Bottom Line
Is litigation driving Florida’s insurance crisis, or is it a convenient excuse? The answer is complicated. Litigation has contributed to costs, but it’s far from the only factor. In many cases, litigation exists because insurers have failed to honor their obligations to policyholders.
What we know for sure:
- Florida homeowners are paying drastically more for less coverage
- Recent reforms benefited insurers but haven’t stopped rate increases
- Many legitimate claims are being denied or underpaid
- Climate risk and construction costs are fundamental factors
- Homeowners have fewer legal protections than they did three years ago
The insurance industry won the legislative battle, but homeowners are still losing. If rates don’t stabilize despite litigation reform, it will become increasingly clear that insurers have been using litigation as a scapegoat for a crisis driven by multiple factors, many of which benefit their bottom line.
Protect Your Rights
At Williams Law Association, P.A., we understand the complex intersection of insurance law, policyholder rights, and Florida’s evolving regulatory landscape. Whether you’re facing a denied claim, an undervalued settlement, or questions about your policy coverage, we’re here to help you navigate these challenging times.
Don’t let insurance companies take advantage of you. If you believe your claim has been unfairly handled, contact us for a consultation. Your policy is a contract, and you deserve to receive what you paid for.