Florida Tort Law Changes: Impact on Property and Casualty Insurance

In Florida, recent legislative changes in tort law have reshaped the property and casualty insurance industry. A study by The Perryman Group reveals that reforms implemented in 2022 and 2023 have significantly mitigated potential premium increases, averting an average 14.5% rise and fostering economic growth while preserving jobs in the region.

Impact of Tort Reforms on Insurance and Economy

The report, titled "The Economic Benefits of Tort Reform on Property and Casualty Insurance Rates in the State of Florida," highlights the benefits of these legislative changes. It includes adjustments in fault assignment, filing deadlines, and attorney fees. Consequently, the state witnessed a $4.2 billion boost in business activity and the creation of over 29,000 jobs, enhancing the carrier presence in the market.

Re-entry of Insurance Providers and Litigation Trends

Senate Bill 2-A and House Bill 837 have incentivized insurance providers to re-enter the Florida market, resulting in a significant shift of policies back to private carriers. The report notes a 25% reduction in frivolous lawsuits against property insurers, with litigation filings decreasing from 8,000 per month in early 2023 to approximately 4,000 by November 2024.

Fiscal Implications and Market Stabilization

In addition to risk management benefits, the analysis highlights fiscal advantages from enhanced economic productivity, estimating an increase of $206.6 million in state tax revenues and $155.3 million for local governments. These findings are crucial for insurance industry stakeholders, illustrating the importance of regulatory compliance requirements in market stabilization and providing a predictable cost environment for homeowners and businesses.