Remember the stormy days of March 2023, when the Florida Insurance Guaranty Association voted to add a 1% emergency assessment on all homeowners’ and commercial policies, to help pay outstanding claims left behind by insolvent insurers?
Three years later, FIGA has announced it is ending the surcharge two years earlier than expected, thanks to a quiet 2025 hurricane season, no more insolvencies, a limit on excessive claims litigation and a much-improved Florida market. The move will save policyholders in the state as much as $650 million over the next two years, FIGA Executive Director Bob Ricker said in a bulletin last week.
If the average premium on personal residential policies, for the largest 16 insurers in Florida is about $3,066, as recently reported, the average savings would be about $31 per year.
Over the last five years, starting with an unprecedented period that saw 10 property insurers go under, FIGA has paid more than $2.1 billion in claims to Florida policyholders, “bringing relief to Floridians with unpaid claims,” Ricker said.
The assessment on most property-casualty insurance policies was added in 2023 to help cover bond issues that were needed to pay the surge in unpaid claims. That charge followed assessments of 0.7%, 1.3%, and 0.7% as many Florida insurers struggled with what was called runaway and disingenuous levels of claims litigation.
The 1% emergency assessment will officially terminate Oct. 1.
The end to the assessment is another milepost showing that the late 2022 and 2023 legislative reforms, which repealed one-way attorney fees and assignment-of-benefit agreements, are having the impact the industry had hoped for, officials said.
“The historic reforms by the Florida Legislature in 2022 continue to reverberate through the market, and ending this assessment two years early is yet another indicator that the insurance market has stabilized and is producing savings for consumers,” Florida insurance commissioner Michael Yaworsky said in a statement.
FIGA was created by Florida lawmakers in 1970 to act as a safety net for policyholders who had claims pending with property-casualty insurers that were unable to pay. FIGA is authorized to use insolvent insurers’ remaining assets as well as surcharges on policies.
Florida’s governor in early 2024 proposed a state budget that would have suspened the FIGA assessment as part of a relief package for Florida property owners. But the suspension was deemed too complicated due to the bondholders that were owed payments.
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