2024 Florida Property Insurance Market Outlook

As 2023 recedes into the past, we’re left to contemplate whether 2024 will be the year for an insurance market recovery in Florida. Much will, of course, depend on what the weather and this year’s storm season brings, but signs are positive and point toward stabilization, at the least. Let’s dive a bit deeper into what is meant by stabilization.

Tort-Reform

In March, House Bill 837 became law, implementing the most comprehensive tort reform in Florida’s history. Industry expert statements that the reform is positively affecting litigation costs are seemingly supported by an influx of new carriers and capacity to Florida interested in writing Property.  Also, the recent Property Insurance Stability report issued by the Office of Insurance regulation in Florida also shows significant decreases in litigation post HB-837 becoming effective.

More Insurance Carriers

We are seeing both new insurance carriers being formed as well as carriers coming back to Florida. Many of the carriers are focused on homeowners’ insurance and on opportunities available with Citizens Insurance Company as it seeks to move people off its rolls. Two of the new carriers are Tailrow Insurance, approved in April, and MainSail Insurance, approved in August.

Increasing Capacity

Some carriers are opening for new business as well as increasing the amount of coverage they’re willing to offer on a specific property. This is happening for both homes and commercial risks.

Reinsurance

Much of what we are seeing in the prior two points is being driven by insurers having access to more reinsurance capacity. Although attachments points (the loss level above which reinsurers will pay for the excess) and the cost of reinsurance are still high, we are seeing more reinsurer capacity enter the marketplace and expect continued positive momentum through the mid-year 2024 renewals. On December 31st, reinsurance capital was approaching $650 billion, just off the industry’s all-time high of $675 billion at the end of 2021.

Underwriting

Carriers will continue to be very diligent in their underwriting throughout 2024. Consequently, risks with better underwriting characteristics will fare better in terms of availability and cost of coverage.

Citizens Insurance Company

Citizens will continue to play a vital role throughout 2024. It continues to offer coverage priced well under the private marketplace. This dynamic will result in the continued flow of higher valued commercial properties moving to Citizens. On the flip side, with new carriers coming into the marketplace and the increased interest in Citizen’s residential home market we could see a reduction in its policy count for homes.

Accessibility to affordable insurance in Florida

Even with all the positives noted above, Florida is still facing an affordability crisis for many who have or are seeking insurance. This year’s Florida legislative sessions should see a lot of focus on addressing this issue with a likely centering of immediate cost reduction solutions as well as getting reinsurers to drop their attachment points lower assuming more primary risk from insurance carriers. 

2024 PROPERTY Insurance Renewal Best Practices 

For those facing property insurance renewals in 2024, here are some renewal best practices from our Real Estate team to ensure your submission gets priority from underwriters:

• Ensure construction data provided is accurate and comprehensive.
• Ensure values are at acceptable levels. It is always smart to periodically get a replacement cost valuation done and include it in your renewal discussions.
• Understand your tolerance for risk assumption. Creativity on deductibles can create more cost efficiency in your placement and create more competition with carriers.
• Catastrophe Modeling – Helps insureds understand their loss exposure to catastrophic events and what limit of insurance they should buy.
• Deal with a broker that has specific expertise in placing coverage for property owners in catastrophic exposed areas, like Florida.

For those wanting to learn more about how to drive the best renewal for your Florida property, contact Risk Strategies Business Insurance Team today to learn more.