Analysts: Home Insurance Crisis May Be Nearing End

A Sun Sentinel analysis in January showed that the number of lawsuits filed against the state’s top 25 insurers fell by 13.2% between 2022 and 2023 — from 44,550 to 38,678.

Jerry Theodorou, policy director, finance, insurance and trade for R Street Institute, a center-right-aligned think tank that supports “free markets and limited, effective government,” published an essay on Thursday proclaiming that “the situation is much better” for Florida’s beleaguered insurance market.

Prior to the reforms that took effect in 2022 and 2023, insurers were caught under “mountains of unmerited litigation,” Theodorou wrote.

A large percentage of litigated claims was among several factors that triggered liquidation proceedings against three insurers in the 2022-2023 budget year, according to the most recent annual report of the Florida Department of Financial Services’ Division of Liquidation and Rehabilitation.

In preliminary insolvency reports by the division, litigation was also mentioned as a contributing factor that led to the liquidations of Southern Fidelity Insurance Company in June 2022 and United Property and Casualty Insurance Company in February 2023.

S&P Global’s report stated that spending on legal defense costs by Florida insurers as a percentage of premium fell from 8.4% in 2022 to 3.1% in 2023, he said. That’s still higher than the overall industry average of 1.2% but a significant drop nonetheless, Theodorou wrote.