Why 2026 Is the Year Florida’s Insurance Crisis Finally Begins to “Stabilize”

After years of turmoil in Florida’s property insurance market, marked by skyrocketing premiums, insurers exiting the state, and litigation that drove costs higher, 2026 is shaping up as the year the crisis transitions into a period of measured stabilization. Multiple independent indicators suggest the worst of the volatility is behind the state, and systemic reforms combined with market forces are aligning toward equilibrium.

Here’s how and why this turning point is happening.

1. Legislative Reforms Are Taking Effect

Based on The Insurer, Florida’s insurance market was pushed to the brink over the past decade due to high natural disaster exposure combined with legal and regulatory challenges. But a series of legislative reforms enacted in recent years, particularly in 2022 and 2023, have begun to bear fruit.

These reforms were designed to:

• Reduce excessive litigation by tightening standards for attorney fee awards and the assignment of benefits abuses

• Encourage new carriers to enter the market

• Expand reinsurance capacity and make risk more affordable

• Restore profitability for insurers so they can sustainably write policies

According to industry analysts, these changes have helped transform the market from “deeply unbalanced” to cautiously stable, with major carriers returning to Florida and litigation pressures easing. 

2. Insurers Are Reporting Improved Financial Performance

One of the clearest indicators of stabilization is the shift in insurer profitability:

For years, Florida property insurers struggled with underwriting losses, often paying out more in claims than they collected in premiums. This contributed to market exits and fewer coverage options.

However, a notable turn comes from an AM Best market segment report, which shows:

• Florida’s property insurance market posted an underwriting profit after several years of losses

• Competition is increasing as new carriers enter

• Premium trends are beginning to flatten and normalize

This is significant because profitability is a foundational requirement for sustainable insurance markets: without it, carriers cannot stay solvent and provide coverage. 

3. Premiums Are Flattening and Even Dropping for 2026

Another major development driving stabilization is rate moderation:

• Multiple companies have filed for rate decreases or flat renewals heading into 2026, after years of continuous premium increases.
• Even Citizens Property Insurance, Florida’s insurer of last resort, is proposing rate reductions for the first time in years, signaling improved market confidence.

Because Citizens traditionally sets a baseline risk price in Florida, its shift toward rate reductions indicates underlying stability in risk assessment and capital availability, as said in Spectrum News 13.

4. Market Capacity Is Increasing with New Competitors

For years, Florida’s crisis was compounded by a lack of insurance carriers writing new business, a key symptom of a dysfunctional market.

Today, we’re seeing the opposite trend:

• New insurers are entering or expanding in the state

• Citizens is offloading policies as private carriers take up capacity

• Reinsurance markets are showing signs of stabilization

This increase in competition expands options for homeowners and businesses, reducing pricing power for any single dominant player and improving availability. 

5. Litigation Pressures Are Declining

One of Florida’s most persistent insurance problems has been high litigation activity, particularly assignment of benefits and roof‑claim cases, which drove claim costs up dramatically.

Recent data shows:

• Legal filings are declining year over year

• Defense costs per claim are decreasing

• Lawsuit pressure on insurers is easing

This shift reduces loss costs for carriers and facilitates more predictable underwriting, critical for long‑term market stability. 

6. Homeowners Are Starting to See Predictability in Renewals

Another practical signal that 2026 will be different is the reduction in year‑to‑year volatility in premiums. As Sun Insurance Services said, instead of double‑digit annual increases, many policyholders are now experiencing:

• Flat rate renewals

• Smaller, predictable changes tied to underlying risk factors

• A market where price increases are no longer reflexively linked to storms or lawsuits alone

While premiums remain high compared to the national average, the pace of growth has slowed dramatically, indicating a shift out of crisis mode and toward longer‑term stability. 

2026 Marks the Shift From Crisis to Stability

The Florida insurance market of the early 2020s was marked by volatility, insurer exits, litigation inflation, and rising premiums. But as we enter 2026, solid indicators point toward real stabilization:

• Legislative reforms are lowering legal pressure and attracting capital

• Insurer profitability is returning

• Premium moderation is beginning

• Market capacity is expanding

• Litigation is declining

• Renewals are becoming predictable

Taken together, these trends suggest that 2026 will be remembered as the year the Florida insurance market finally started to recover from years of instability.

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Frequently Asked Questions

1. Why was Florida’s insurance market in crisis before 2026?

Florida's insurance market faced years of instability due to a combination of frequent natural disasters, rampant litigation (especially involving assignment of benefits and roofing claims), insurer insolvencies, and skyrocketing premiums. This environment discouraged new carriers and made coverage both expensive and scarce.

2. What changed in 2026 to stabilize Florida’s insurance market?

A mix of legislative reforms, improved insurer profitability, rate moderation, and increased competition contributed to market stabilization. Notably, the impact of 2022–2023 legal reforms is now visible, with reduced litigation, expanded market capacity, and more sustainable underwriting.

3. Are premiums going down in Florida in 2026?

Yes, several insurers, including Citizens Property Insurance, have filed for rate decreases or flat renewals. This marks a major shift from previous years of constant double-digit hikes. Homeowners are now seeing more predictable and affordable premium trends.

4. Is it easier to get property insurance in Florida in 2026?

Yes. More insurers are writing policies in Florida, and Citizens is offloading policies as private market carriers return. This increase in market capacity gives consumers more choice and improves the overall health of the insurance ecosystem.

5. What role did litigation reforms play in stabilizing the market?

Reforms targeting attorney fee abuses and assignment of benefits schemes have significantly reduced the volume of lawsuits, which previously inflated claim costs. As a result, defense costs are down, and insurers now operate in a more predictable legal environment.

6. Are these changes permanent or temporary?

While the improvements in 2026 are promising, long-term stability depends on continued enforcement of reforms, weather patterns, and market discipline. However, multiple indicators suggest the foundation for lasting change is in place.

7. How does this affect Florida homeowners and real estate buyers?

A more stable insurance market improves home affordability, transaction confidence, and investment appeal. Lower premiums and broader policy availability also support a more active housing market, especially in high-value, coastal areas.

8. What should I do if my premium is still high in 2026?

Shop around; increased competition means more options may be available now. Consider working with an experienced real estate advisor or insurance broker who understands Florida’s evolving insurance landscape and can match you with the right carrier.