Florida State House by F McGady is licensed under CC 4.0
The affordability challenges many Americans are facing are partially driven by lawsuit abuse that drives up insurance costs. Addressing the policies at the root of the problem has been difficult, but red states are leading the fight.
Not surprisingly, Florida is one of those leaders. The Sunshine State has faced high insurance costs – and not just because of hurricanes. Now, thanks to their lawsuit and tort reforms, the tide is turning.
A new announcement just this week highlights continued declines in insurance costs for Floridians. The United States Automobile Association (USAA) just announced that they will be returning approximately $1 billion to 830,000 Florida insurance members – including a $500 million dividend and lowered premiums.
This is on top of a whopping 42 other Florida auto insurers filing rate decreases.
These massive wins are fueled by tort reform.
Prior to the passage of landmark tort reform in 2023, Florida was well-known for its heavily litigious insurance environment.
In 2019, Florida was home to 6% of all nationwide homeowner’s lawsuits and 99% of all auto glass repair claims. This rise also reflects an increase in fraudulent insurance lawsuits. Coupled with increased vulnerabilities to natural disasters, the Florida insurance market became increasingly hostile to companies, leading many to leave the state.
In 2023, Governor Ron DeSantis signed HB 837 into law. This law reduces the statute of limitations for negligence actions from four years to two years, amends the comparative fault statute, modifies one-way attorney’s fees and mandates transparency and disclosure of medical damages.
The results have been overwhelmingly positive. Auto glass litigation decreased from 24,720 lawsuits to 2,613 from 2023 to 2024. Additionally, insurance industry spending in legal defense costs have gone from $1.6 billion in 2022 to $537 million in 2025.
Insurance companies are also recognizing this positive reform with 15 new property and casualty insurance companies entering the Florida marketplace. This has allowed Florida to generate $206.6 million in new state tax revenue and more than $4.2 billion in annual gross product according to the Florida Justice Reform Institute.
These tort reforms are not just beneficial for the companies, they help consumers. When insurance firms are not spending significant amounts of money fighting off lawsuits, they are able to more effectively compete on prices. The result is consumers experiencing a 14.5% decrease in property and casualty insurance and a deceleration in rate increases from 16.1% in 2021-2022 to 6.9% in 2023-2024.
Insurance companies must account for high and unpredictable litigation costs or risk losses and being unable to operate in a state. By reforming the tort system to crack down on frivolous lawsuits, Florida insurers now can operate in the market with more certainty.
While other states deal with high insurance costs, Florida stands as a model of how tort reform can boost tax revenue and reduce costs for insurers and customers. As more states join the charge, like Georgia and Louisiana have, Americans can expect more desperately needed cost savings.
