The American Consumer Institute urges Florida Governor Ron DeSantis and the state legislature to strongly consider tort reform during their upcoming special legislative session. Over the years, Florida has suffered from a range of issues related to insurance fraud, frivolous lawsuits, and the assignment of business suits, each contributing to a poor business environment for insurance providers, and as a consequence, unnecessarily high property prices for consumers.
According to the Florida Office of Insurance Regulation (OIR), in 2021 Florida accounted for 79 percent of all homeowner insurance lawsuits in America despite making up only 9 percent of homeowner insurance claims. This represents nearly 116,000 property claim lawsuits that were filed against insurance companies with underwriting losses exceeding one billion. In addition, these numbers are actually up from 2019 when 76 percent of all homeowner insurance lawsuits originated in Florida. This shift illustrates a steadily worsening insurance climate in a state where it is Floridians who will bear the brunt of higher property prices.
It is also supported by a variety of national rankings that repeatedly place Florida in the bottom tier of states for its lawsuit climate. A 2019 Lawsuit Climate Survey ranking conducted by Harris Insights & Analytics on behalf of the Institute for Legal Reform (ILR) placed Florida at 46th in the nation for its overall state liability environment. In addition, Florida spends 3.6 percent of its GDP on tort costs, which makes it the worse in the nation. For the average Florida household, that is $4,442 per year.
The independent insurance rating agency Demotech, which examines the property insurance marketplace and assigns a Financial Stability Rating (FSR), warned in March that without significant state reforms Florida consumers would face “substantial premium increases.” Demotech also notes that current conditions “are unsustainable” and require immediate corrective action. We concur.
When the Florida legislature convenes on March 23rd, we strongly encourage legislators to take immediate action to rein in the ballooning number of lawsuits in the state and help alleviate the taxing financial burden they place on consumers. This issue cannot be ignored any longer.