For the last few years, Florida homeowners and business owners have faced a “hard” insurance market characterized by skyrocketing premiums, strict underwriting, reduced coverage options, and the liquidation of several insurance companies. However, as we moved into 2025, the tide—or more aptly put, “the winds”—changed and the “Soft Market” arrived.
The benefits of a softening market are typically premium relief and broadened coverages without surcharges. This doesn’t mean rates will drop to decade-lows overnight or that just any property is insurable.
Quality companies have adjusted their underwriting where possible and are lowering rates on best-in-class properties. They’ve chosen to rebalance their coverage territories and their strategies. The biggest savings in premiums are still limited to smaller, newer companies with less financial stability, but it is broadening.
Here is a look at the three major factors that drove the “Softer Market”:
1. The Impact of Tort Reform For years, Florida was an outlier among the 50 states’ insurance markets, accounting for nearly 80% of the nation’s property insurance litigation despite having only 9% of the total number of claims.
Sweeping tort reform passed by the Florida Legislature in 2023 (specifically SB 2-A and HB 837) has started to reap rewards in the decrease in the cost of claims litigation. By eliminating “one-way attorney fees” and ending the “Assignment of Benefits” (AOB) loopholes, the state has significantly curbed frivolous lawsuits. This has restored “underwriting discipline,” allowing insurance companies to focus on paying legitimate claims rather than fighting predatory legal battles.
2. Reduced Reinsurance Costs Insurance companies don’t typically keep 100% of premiums and pay 100% of the claims reported. After collecting premiums, they buy “reinsurance” to reduce their total maximum exposure to loss—effectively selling some of their liability to other insurance companies and investors. This is similar to placing a mortgage on your home where the lender then “securitizes” or sells the loan to a securities company post-closing.
Reinsurance protects insurance companies from massive, potentially crippling losses from catastrophes like hurricanes, flooding, and superstorms. In previous years, reinsurance costs were at record highs, tracking the same underlying issues of the insurance market.
Thanks to the stabilized legal environment, global reinsurers are once again competing to reinsure insurance companies. Recent renewals have shown risk-adjusted price decreases for many carriers. When it costs your insurance company less to protect itself, they have more room to offer competitive rates to you.
3. Reduction in Claims Severity “Claims severity” refers to how much a single claim costs an insurer to settle. With the new reforms, a reduction in the “social inflation” that used to bloat every claim has entered the market. Without the pressure of inflated attorney fees and long-tail litigation, claims are being settled faster and more fairly. This efficiency is a primary reason why many Florida domestic insurers reported their first profitable year in nearly a decade in 2024.
Why Your Strategy Still Matters
While the effect of a softening market is a breath of fresh air, now is not the time to “set it and forget it.” Even as rates stabilize, the strength of the company you choose remains paramount. Florida is still a high-risk state, and you need a carrier with the financial reserves to handle the next big storm.
Furthermore, claims experiences vary wildly between companies. A lower premium is only a “deal” if the company shows up for you when you need them most. At Allstar Insurance Services Inc., we emphasize that while the market is getting better, important coverages—like proper water damage limits, flood limits, replacement cost valuations, law & ordinance, and loss of use coverage—cannot be overlooked.
The Bottom Line: The Florida market is healing, and better rates are here. But in a state where the weather can change in an instant, the quality of your carrier and the expertise of your agent remain your best defense.