Florida’s beleaguered property insurance market is seeing a glimmer of hope as two new providers, Incline National Insurance Company and Florida Insurance and Reinsurance Company, have been approved to operate. This brings the total to 14 new insurers since 2022 reforms aimed at stabilizing the market and curbing rising premiums, offering a potential path to increased competition and more options for homeowners.
Florida’s Insurance Market Sees New Entrants
Florida’s Office of Insurance Regulation (OIR) recently announced the approval of two new property insurers: Incline National Insurance Company, based in Texas, and Florida Insurance and Reinsurance Company, a Florida-domiciled entity. These additions mark the 13th and 14th new carriers to enter the state’s market since significant legislative reforms were enacted in 2022 and 2023. These reforms primarily focused on reducing incentives for what insurers termed "frivolous lawsuits," a major factor cited for the state’s high insurance costs.
- Incline National Insurance Company: This company, with over 75 years in business, is approved to write various coverages including homeowners multi-peril, allied lines, and private passenger auto, with plans for statewide offerings.
- Florida Insurance and Reinsurance Company: This Florida-based insurer will primarily focus on coverage for condominiums and condo associations, as well as smaller multi-tenant office buildings. They also specialize in reinsurance products.
Impact of Recent Reforms
The influx of new insurers is a direct result of the 2022 and 2023 legislative changes designed to stabilize Florida’s volatile insurance market. These reforms aimed to reduce litigation costs, which were a significant burden on insurers. The changes included limiting attorney fees in litigated claims, leading to a dramatic decrease in lawsuits filed against property insurers.
Tim Cerio, CEO of Citizens Property Insurance Corp., noted that Florida saw the lowest average homeowner premium increase in 2024, at around 1%, a stark contrast to previous years where the state experienced some of the highest increases nationwide. This indicates a healthier market, though some homeowners, like Alan Bickford of St. James City, still express skepticism regarding easing costs.
Market Stabilization and Future Outlook
State officials are optimistic about the market’s stabilization. Data from the OIR shows positive trends:
- Profitability: Florida-incorporated insurers reported a net income of $944 million in 2024, a significant improvement from a $741 million net loss in 2022.
- Rate Changes: Since January 2024, 27 companies filed for rate decreases, and 41 requested no change or a 0% increase.
Despite these positive indicators, challenges remain. While overall rates may be stabilizing, individual premiums can still rise due to factors like increased home values from inflation. Additionally, some new insurers may initially avoid high-risk areas like South Florida during hurricane season. The OIR continues to welcome new applications, striving to process them within 60 days, requiring companies to raise $2.5 million to $5 million to be approved.
Key Takeaways
- Florida has approved two more property insurers, bringing the total to 14 new companies since 2022 reforms.
- The new insurers are Incline National Insurance Company and Florida Insurance and Reinsurance Company.
- Legislative reforms in 2022 and 2023, aimed at reducing litigation, are credited with market stabilization.
- Florida saw a 1% average homeowner premium increase in 2024, the lowest in the nation.
- State-incorporated insurers reported significant net income in 2024, a turnaround from previous losses.
- Despite positive trends, individual premiums can still increase due to factors like inflation, and new insurers may be cautious about high-risk areas.
Sources
- Two New Property Insurers Approved, | Florida Realtors.
- Florida property insurer wants to increase rates 31%. More to come?, The Palm Beach Post.
- Here’s what homeowners need to know about Florida’s new insurance providers, WPTV.