The Florida property insurance industry has undergone a great deal of transformation over the past few years, and the trend continues to show no indications of slowing down. After a series of devastating storms, rampant litigation, and instability in Florida’s insurance industry, Florida lawmakers submitted a wave of legislation to safeguard homeowners and stabilize the Florida insurance industry.
If you own a home in Fort Myers, these changes may affect how you purchase Florida insurance, make a claim, and maintain your coverage in 2025. This article describes the most significant changes and how they impact you.
Why the Market Needed Reform
Florida’s property insurance market was in shambles following Hurricane Ian and other catastrophes:
- Insurer insolvencies left policyholders scrambling for new insurance.
- The excessive litigation rates made Florida the home of nearly 80% of the nation’s property insurance lawsuits despite possessing just 9% of the claims.
- Skyrocketing insurance costs and high rate increases straitjacketed family budgets across the state, with Florida having already experienced one of the highest average rate increases in earlier years.
- Florida’s insurer of last resort, Citizens Property Insurance, has experienced a steep rise in policyholder rolls, thereby elevating overall market risk.
Florida’s new legislative reforms have had the effect of balancing the insurance market, resulting in wholesale reductions in rates for most policyholders and stopping the cycle of occasional premium hikes. This has made a radical difference in affordability. Insurers are even beginning to see lower premiums, and government officials have implemented specific rate reductions in certain counties. These reforms were implemented solely to balance the market, stabilize insurance premiums, and enhance long-term affordability for Florida consumers.
Family Laws Affecting Homeowners
Senate Bill 2A (December 2022)
Primarily aimed at short-term market stabilization, SB 2A provided some fundamental provisions:
- Cancellation of Assignment of Benefits (AOB): Contractors can no longer get their hands on a homeowner’s insurance benefits without permission, reducing fraudulent claims and abuse of the justice system.
- Reduced Timeline for Claims: Policyholders now have just one year (previously two years) from the date of damage to report claims, encouraging faster settlement.
- Limited Attorney Fee Multipliers: The law overhauled the ancient regime under which attorney fees, including one-way attorney fees and attorneys’ fees, were generally awarded to plaintiffs’ attorneys in insurance cases. By limiting attorney fee multipliers and eliminating the one-way attorney fees provision, the reform aims to curb excessive attorney fees and litigation expenses that lead to growing premiums.
- Mandatory Citizens Flood Policy: Policyholders who are citizens residing in Special Flood Hazard Areas (SFHAs) are now required to have flood insurance as a condition that they would be able to renew their windstorm policy.
The bill also covers frivolous suits and claims, which tend to cap the expense of litigation against insurers and policyholders.
This bill is among the steadfast tort reforms of Florida, intended to combat the abuse of the justice system and promote market stability. With the reformation of how the parties and lawyers deal with each other in insurance disputes, the reforms will align the interests of all the parties to ensure a more equitable process of conflict resolution.
Senate Bill 7052 – Insurer Accountability Act (2023)
Enacted in 2023, SB 7052 aims to enhance transparency and accountability for insurance companies. This bill enacts robust consumer protections designed to protect policyholders from abusive insurance practices. Provisions include:
- Limited Policy Cancellations: Insurers are barred from canceling policies during the time a hurricane claim is being settled or within 90 days after the storm’s landfall.
- Claim Handling Requirements: Demands prompt claims handling and communication, imposes penalties for delay and mandates insurers to settle legitimate claims fairly.
- More Strict Financial Disclosures: Insurers are required to disclose more specifically about their financial condition, underwriting business, and claim payments.
- Roof Deductible Regulation: Insurers have to disclose roof deductibles and can no longer deny entire roof claims based on age alone if a storm causes damage.
Consumer organizations have advocated for such reforms to safeguard consumer rights and prevent discrimination against policyholders in the claims process.
For homeowners, the act provides additional protection in the claims process while ensuring insurers are adequately funded.
Mandatory Flood Insurance Requirements (2024–2027)
Effective as of 2024, Citizens Property Insurance Corporation mandates flood insurance on all homes insured for more than $600,000, not depending on the flood zone. The provisions are an indication of current trends in Florida’s property insurance market, wherein market forces and legislative reforms compel new mandatory requirements for coverage.
Phased implementation:
- 2024: Homes valued at over $600,000
- 2025: Homes valued at over $500,000
- 2026: Homes valued at over $400,000
- 2027: All Citizens’ policyholders will be required to carry flood insurance
Florida insurers are adapting to the new flood insurance regulations by re-writing their policies and working to accommodate shifting state requirements.
This shift emphasizes the growing importance of flood protection—regardless of whether the home is outside even the highest-risk flood areas.
What This Means for Fort Myers & Cape Coral Homeowners
1. You May Have to Add or Increase Flood Insurance
Even outside of a high-risk area, compulsory flood insurance is on the rise, mainly if you’re at the mercy of Citizens. Standalone carriers are also likely to follow suit.
Reinsurance and reinsurance costs are significant drivers for the need for compulsory flood insurance because insurers need to offset their risk capital. Higher reinsurance costs have a direct effect on the premiums homeowners pay for flood insurance.
If your policy does not cover flood protection, you could be underinsured. Ask your agent to review FEMA flood maps and Risk Rating 2.0 considerations for your property.
2. Claims Filing Is More Urgent
Homeowners now only have one year to file claims for property damage, and all claims must be filed within that period. Holding onto receipts, photos, and a home inventory is more important than ever.
Additionally, work performed without notice to your carrier or work performed through AOB contracts can result in denied claims.
3. Roof Claims Must Be Handled with Care
If the storm has damaged your roof, you may be eligible for complete replacement — even if you have an older roof. But you may have to adhere to new inspection and documentation requirements. Lott & Gaylor can assist you in making certain that your roof is properly rated and that your deductible is matched to your tolerance for risk..
4. Having a Local Agency Is More Important Than Ever
With rapidly evolving regulations, tight filing deadlines and shifting qualification requirements, a local, accessible insurance expert isn’t just convenient—it’s essential.
If you’re not certain how these laws will impact your homeowner’s policy, roofing standards, or flood policy obligations, your local experts at Lott & Gaylor Insurance are here to help.
Call us today for a policy checkup or claims advice—we’ll see that you’re covered and prepared for 2025 and beyond.
