Florida homeowners recovering from years of skyrocketing insurance premiums and coverage cuts have received some positive news: regulators have approved a new insurer to enter the state’s market, and a new partnership between two private companies could help policyholders save money.
The initiatives are signs that the Sunshine State property insurance market might finally be stabilizing after plunging into a crisis over the past few years, becoming more affordable for homeowners.
Why It Matters
Several major insurers cut coverage across Florida or withdrew from the state entirely in the past few years, citing increasing costs and growing catastrophe exposure. A combination of excessive litigation, widespread claim fraud and the growing risk of more frequent and severe natural disasters contributed to create a perfect storm that plunged the state’s property insurance sector into a crisis.
As premiums skyrocketed and availability shrank, lawmakers in Tallahassee introduced regulatory reforms trying to limit litigation and attract insurers to the state. Experts and regulators think these moves are now starting to pay back.
This aerial picture taken on September 27, 2024, shows damaged houses after Hurricane Helene made landfall in Steinhatchee, Florida. This aerial picture taken on September 27, 2024, shows damaged houses after Hurricane Helene made landfall in Steinhatchee, Florida. CHANDAN KHANNA/AFP via Getty Images
What To Know
Earlier this week, Florida’s Insurance Commissioner Mike Yaworsky announced that a new property and casualty (P&C) insurer, Mangrove, was approved to operate in the state. The company joins 10 others which have received regulators’ green light to enter the state’s market since Florida legislators passed a series of reforms to stabilize the state’s property insurance market in 2022-2023.
Mangrove plans to assume tens of thousands of policies from Citizens, Florida’s state-backed insurer of last resort. The move could successfully help depopulate Citizens, which has ballooned in size over the past few years, raising concerns among experts and legislators.
This year should also see the beginning of the partnership announced by Embark MGA and Security First Insurance in late December 2024. The two companies are working on the launch of a program which will integrate insurance quotes into the homebuying and mortgage qualification process, making it easier for buyers to get coverage while purchasing a property.
The program will only be available to homebuyers purchasing a brand new construction property built by both national and regional homebuilders, according to the two companies.