Florida homeowners are set to receive significant financial relief as the Florida Insurance Guaranty Association (FIGA) announced the early termination of a 1% emergency surcharge. This move, effective October 1, 2026, will conclude the assessment two years sooner than originally planned, potentially saving policyholders millions.
Key Takeaways
- A 1% emergency surcharge on Florida property insurance policies will end on October 1, 2026, two years earlier than scheduled.
- This early termination is expected to save Florida homeowners and businesses up to $650 million over the next two years.
- Factors contributing to the early end include a quiet hurricane season, no new insurer insolvencies, and legislative reforms reducing lawsuits.
Early End to Insurance Surcharge
The 1% emergency assessment, initially implemented on October 1, 2023, was put in place to help repay bonds issued after a series of insurance company failures. These failures led to unpaid claims and the need for refunds of unearned premiums. The early termination of this surcharge is a direct result of a more stable insurance market in Florida.
Estimated Savings for Policyholders
Officials estimate that the early end to the surcharge will save Florida policyholders up to $650 million through September 30, 2028. The exact savings for individual policyholders will vary based on their annual premium costs. For example:
- A $2,000 annual premium could see savings of approximately $20 per year.
- A $3,500 annual premium could result in savings of about $35 per year.
- A $5,000 annual premium could lead to savings of around $50 per year.
Factors Contributing to Market Stabilization
Several key factors have contributed to the improved financial standing of Florida’s property insurance market, making the early surcharge termination possible. These include:
- A relatively quiet 2025 hurricane season.
- The absence of new insurance company insolvencies.
- Successful legislative reforms enacted in 2022, which have helped to reduce the volume of lawsuits.
Mark Friedlander of the Insurance Information Institute stated that "Florida’s property insurance market today is in its strongest financial position in a decade." This sentiment was echoed by Florida Chief Financial Officer Blaise Ingoglia, who called the announcement "a huge win for Florida’s policyholders."
The Role of FIGA
The Florida Insurance Guaranty Association (FIGA) serves as a crucial financial safety net for policyholders when insurance companies become insolvent. Funded through various means, including assets from failed insurers and assessments on policies, FIGA’s ability to terminate the surcharge early reflects the positive trajectory of the state’s insurance sector.
Sources
- Florida homeowners to see this insurance surcharge end early, WPTV.
- Florida Insurance Fee Ends Two Years Early, | Florida Realtors.