Florida’s insurance crisis is receding. Fraud and frivolous lawsuits are declining, insurers are returning to the state, and commercial and residential property and personal auto insurance premiums are plunging.

Comprehensive tort reform passed in 2022 and 2023 appears to be bearing fruit. But that doesn’t mean that all of Florida’s insurance troubles are behind it. Florida’s legal rules have largely fallen in line with the rest of the nation, but rising verdicts and settlements plague the casualty market as they do everywhere else.

Personal-injury lawyer billboards still line the roads. And when true disaster strikes, the tort reform measures may make it harder for some policyholders — both residential and commercial — to recover what they believe they’re owed.

As states around the country weigh tort reform legislation (see related stories below), Florida has become an important case study for its impact, though some observers are still worried that one bad hurricane season could sweep away much of the progress.

Just a few years ago, personal auto rates in Florida were sky-high, and homeowners scrambled to replace insurance plans canceled by bankrupt insurers. Surging property premiums forced thousands of businesses onto the rolls of Citizens Property Insurance, the state-owned property insurer of last resort, putting taxpayers on the hook for losses.

Tort reform

In the wake of Hurricane Ian in late 2022 and years of rising litigation, Gov. Ron DeSantis passed a major tort-reform bill. Among other measures, it ended the automatic award of attorney’s fees to prevailing policyholders in property insurance disputes.

It also prohibited assignment-of-benefits agreements, which allowed policyholders to transfer their insurance claim rights to contractors or repair companies. During the peak of the crisis, roofing crews canvassed neighborhoods after storms to convince homeowners to let them file questionable or inflated claims.

“The reform was more effective than anyone could’ve dreamed,” said Randy Fuller, Florida segment leader for reinsurer Guy Carpenter, a unit of Marsh. “That’s because the problem was probably bigger than anyone knew.”

To study the impact, Mr. Fuller analyzed 1.4 million mostly homeowners policies to compare losses from 2017’s Hurricane Irma and 2024’s Hurricane Milton. Claim frequency shrank by 69% and claim severity by 74% in areas that were exposed to similar wind speeds (see chart).

In the lowest-wind areas, claim frequency and severity fell by over 90%. “That’s the biggest smoking gun of the fraud,” Mr. Fuller said, because true wind damage was lowest in these areas.

In March 2023, a second bill expanded tort reform beyond property insurance. The automatic award of attorney’s fees to prevailing policyholders was curtailed in civil claims. The statute of limitations for negligence suits was reduced from four years to two years. The negligence standard shifted: A plaintiff found more than 50% liable for their own injuries was barred from recovering damages. And the evidence plaintiffs could provide to prove medical damages was limited to the amounts actually paid.

Losses plummet

The changes have slashed Florida insurers’ defense costs, according to a study by ratings agency A.M. Best. Insurers spent $131 million on defense and cost-containment in 2025, down nearly 80% from their 2022 high.

“Tort reform has changed how we approach cases, and the quality of the cases,” said Alan C. Nash, co-chair of the premises and retail liability practice at Marshall Dennehey in Fort Lauderdale. Plaintiffs lawyers are less likely to take on cases with smaller medical bills, or cases where the plaintiff shared some of the blame, Mr. Nash said.

In casualty cases, the modified negligence rules “give us and the adjusters a strong bargaining advantage, and helps settle the claims more reasonably,” said Lisa Weinstein, vice president of risk and compliance for Cove Communities, a recreational vehicle and manufactured home community owner in Tampa. “We’ve seen a few plaintiff firms that have dropped their clients when we pushed back by saying what their client did,” and cases are being handled more efficiently, Ms. Weinstein added.

On the property side, Morgan and Morgan, recognized as the nation’s largest plaintiffs law firm by headcount, slashed its Florida insurance litigation practice from 30 attorneys to five in June 2025.

“Consumers are trying to work things out on their own with their insurance provider, and that’s a good thing,” said Fred E. Karlinsky, Fort Lauderdale-based chair of the insurance regulatory and transactions practice at Greenberg Traurig.

Thanks to smaller and more predictable losses, insurers are returning to the state, backed by reinsurance capacity and catastrophe-bond capital.

“National carriers in commercial real estate are cautiously optimistic and expanding their exposure in the state of Florida each year,” said Dan Cioci, a Fort Lauderdale-based broker with Brown & Brown. Rates are still highly dependent on geography, construction type and loss history, Mr. Cioci said.

As competition returns, companies are leaving last-resort, state-owned Citizens for private insurers. The number of commercial properties with Citizens has plunged from 13,600 in 2024 to 4,500 in July, a Citizens spokesman said.

Commercial property rates are also falling. The average cost per surplus-line commercial property policy, a rough proxy for rates, declined 35% in the first half of 2026, compared with the first half of 2025, according to the Florida Surplus Lines Services Office. Builders risk rates declined 30% in the same period, and windstorm or hail was down 28%.

Mr. Cioci credits both tort reform and a relative lack of storm activity for the dramatic recent rate declines. The last hurricane to hit Florida was Milton, in October 2024, and no hurricane hit the U.S. last year.

Liability trends

In Florida, the picture regarding liability insurance is more complicated, as it is elsewhere in the nation. The Florida Surplus Lines Office reports a flattening in the average cost per commercial general liability policy starting in mid-2024, after eight years of steady increases.

Commercial auto liability rates in Florida are expected to increase by mid-single digits this year, similar to the rest of the country, says Carol Murphy, head of casualty for Howden U.S. “Driving behaviors have declined since the pandemic,” she said.

Some companies with high exposure to premises liability are still waiting for relief. “Several carriers have pulled out of the (habitational) market,” says Ms. Weinstein, of Cove Communities. “Premiums are still increasing, self-insured retentions are still increasing and coverages are getting smaller.”

Ms. Weinstein said she was encouraged by a reform provision that gives multifamily property owners a presumption against liability for third-party criminal acts if they implement security measures. But she said she can’t justify the costs of the required assessment and upgrades, given that Cove could still face expensive lawsuits.

“I’d expected the 2023 tort reform to have a more lasting effect on multifamily,” she said.

Albert Geraci, a Fort Lauderdale-based broker and president of the Florida Surplus Lines Association, sees an improved market for buyers. Casualty rates are still high, but some property owners are benefiting from stronger competition in the insurance market, he said. Some insurers are now offering higher limits on assault and battery coverage, for example, while others are removing firearms exclusions.

The continued firmness of the casualty market suggests that Florida’s tort reform efforts have slowed, but not stopped, the impact of “social inflation,” or the increase in court awards and settlements. From 2009-2022, Florida ranked second for “nuclear” jury verdicts over $10 million, according to consultancy Marathon Strategies. By 2024, its ranking had dropped to tenth. But the number of corporate nuclear verdicts nationwide has more than tripled between 2020 and 2024.

As smaller, more “low-quality” cases are being filtered out of Florida’s court system, plaintiff’s lawyers are pushing harder on higher-stakes cases with clearer liability, says Mr. Nash, the defense lawyer. Holly Howanitz, a Jacksonville-based corporate defense lawyer at law firm Tyson & Mendes, who focuses on complex casualty cases, said she has not seen a decline in premises liability claims or transportation claims since tort reform.

If a plaintiff has suffered significant injuries or damages and can make a strong case that the defendant is liable, juries are still imposing large verdicts based on pain and suffering or noneconomic damage, she said. Rather than counting on tort reform to “save” them, defending companies should try novel tactics to sway juries, such as admitting liability or personalizing the defendants, she said.

In Florida as elsewhere, social inflation is hitting hardest in excess and umbrella lines. Average excess commercial general liability premiums in Florida have declined slightly since 2024, but they’re still twice as high as in 2018. Risk managers must now buy more layers to reach a given limit, noted Mr. Geraci.

Policyholders burdened

Attorneys and activists for policyholders say tort reform has gone too far. The reforms “shifted more risk and procedural burden onto the policyholder, whether it’s a homeowner or a business,” said Steven M. Bush, a Jacksonville-based attorney for policyholders at Merlin Law Group.

Under the tort reform measures, property owners must notify their insurer of a claim within a year or 18 months for cases when additional damage was found, or repair costs exceed the original estimate. Mr. Bush says that may not be enough time when roof damage from one storm is sometimes revealed only in the next storm.

The new rules also make it harder for policyholders to find representation when they are treated unfairly, especially on smaller claims involving homeowners or small businesses, Mr. Bush said.

Apart from the tort reform laws, insurers have tightened coverage, offering claimants the depreciated cash value of a damaged roof instead of full replacement cost, and non-matching replacements for damaged materials, Mr. Bush said. A 2022 reform provision repealed a rule requiring a full roof replacement when more than 25% of a code-compliant roof is damaged.

Insurance industry critics say insurers are reaping more savings through restricting payouts than curtailing frivolous lawsuits. In news investigations and in a Senate hearing, field adjusters in Florida have contended that insurers have modified their reports or pressured them to reduce damage estimates. In 2024, Heritage Property & Casualty paid Florida a $1 million settlement and admitted to sending unlicensed adjusters to inspect properties.

Policyholders can appeal to the state regulator if they feel their claim is not being handled fairly, a spokesman for the American Property Casualty Insurance Association said. He pointed to a 2024 law prohibiting altering adjuster’s reports without explanation and a recent report commissioned by the group finding that tort reforms have driven an average 14.5% reduction in property and casualty insurance costs.

In Mr. Cioci and Mr. Geraci’s view, tort reforms have brought Florida’s laws more in line with the rest of the nation, and their insurance markets are now more similar as well. But in a litigious nation facing escalating natural catastrophe risk, Florida remains more vulnerable than most states.

“The ultimate durability of (Florida’s) legislative and structural reform is yet to be fully tested through a truly severe, high-intensity hurricane season,” Fitch ratings said in a June report.

More states follow Florida’s lead as tort reform gains momentum

In May, New York Gov. Kathy Hochul signed tort reform legislation aimed at reducing auto premiums in the state. “This is how we are tackling the affordability crisis head-on,” she said, invoking one of the hottest political concepts of the year.

The bill tightened the threshold for injuries that qualified for noneconomic damages and capped those damages for drivers found at fault, among other measures.

The new law is encouraging, not least because the governor is a Democrat, said Sean Kevelighan, president of the Insurance Information Institute. In recent years, most progress on tort reform has occurred in Republican-led states, which are seen as more business-friendly.

“Reform has now become a bipartisan issue when you factor New York into it,” Mr. Kevelighan said. A governor’s leadership is a “key ingredient” in obtaining tort reform in a state, he said.

Several states have either passed tort reform or watched it gain momentum recently:

In April 2025, Georgia Gov. Brian Kemp signed bills aimed at restricting inflated medical expenses and narrowing property owner liability for third-party criminal acts, among other measures. A year later, the state’s insurance commissioner announced an estimated $450 million in personal auto premium reductions. Atlanta’s transit authority reported a $2.8 million drop in casualty and liability costs.

One month later, Louisiana Gov. Jeff Landry, following Florida’s lead, barred plaintiffs in a personal injury from recovering damages if they were found to be 51% or more at fault. The Insurance Information Institute says average statewide premiums decreased 0.4% in 2025 across all property and casualty lines, after four years of increases.

In March of this year, Wisconsin Gov. Tony Evers, also a Democrat, signed a bill that raises the bar for courtroom evidence by requiring lawyers to prove to a judge that their expert’s opinion is “more likely than not” reliable before it is heard by a jury. The American Tort Reform Association called it a win against “junk science” in product liability cases.

Even as tort reform moves forward as part of a push for affordability, a countervailing populist trend is playing out in courtrooms across America. In a 2025 survey by the law firm Orrick, 72% of Americans agreed that “an important function of juries is to send messages to corporations to improve their behavior,” up from 62% in 2022.

North Carolina ban adds to growing state curbs on third-party litigation financing

In June, North Carolina became the first state to ban third-party litigation funding, in which investors finance lawsuits in return for a stake in the outcome. A funder can incur civil penalties of up to $50,000 per violation. The bill was praised by insurance industry and pro-business groups as a curb on abuse of the legal system.

Attempts to rein in third-party litigation funding by the U.S. House and Senate and the federal judiciary’s rule-making authority have stalled, prompting several states to step in. As part of its tort reform last year, Georgia passed laws requiring financiers to disclose the terms of funding agreements over $25,000 and register with the state’s banking agency, disclosing ownership. The law bars funders from influencing legal strategy and makes their agreements available through the discovery process.

In 2024 and 2025, states including Arizona, Colorado, Indiana, Kansas, Louisiana, Montana and Oklahoma adopted measures requiring disclosure of litigation funding. Some states also forbade funders from influencing strategy or barred foreign-owned entities as investors. Montana and Louisiana cap a funder’s share of the recovery.

In January, ISO issued an optional endorsement for commercial liability programs that triggers upon coverage disputes, requiring parties to disclose third-party financial backing.