Florida's Troubled Home Insurance Market: A Cycle of Reform and Crisis

Florida's home insurance market is facing significant challenges, exacerbated by recent reforms initiated by Governor Ron DeSantis in response to Hurricane Ian. These reforms, intended to stabilize the market and prevent a mass exodus of insurers, have instead led to a situation reminiscent of past crises, with homeowners paying more for inadequate coverage while insurers report substantial profits.

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The reforms enacted by DeSantis in 2022 aimed to address the high rates of insurer insolvency in Florida, which has one of the highest concentrations of such failures in the United States. Following Hurricane Andrew in the 1990s, similar market-friendly measures resulted in a surge of undercapitalized insurers. The current reforms have led to the depopulation of the Citizens Property Insurance Corporation, the state's insurer of last resort, with approximately 355,000 policyholders losing coverage as private insurers take over. However, many of these new insurers have troubling histories, raising concerns about their stability.

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Among the new entrants to the Florida insurance market is Viceroy Preferred Insurance Company, which shares leadership with Monarch National Insurance Company, previously fined for mishandling claims. Monarch itself is linked to FedNat Insurance Company, which declared insolvency post-Hurricane Ian. Other new insurers, such as Patriot Select Property and Casualty Insurance and Apex, also have connections to past insolvencies. A troubling trend has emerged, with many of these insurers denying a significant percentage of claims, raising alarms about their financial practices.

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The ratings agency Demotech has been pivotal in Florida's insurance landscape, but its evaluations have come under scrutiny. Insurers rated by Demotech are reportedly 30 times more likely to become insolvent than those rated by major agencies. Between 2017 and 2025, 17 insurers became insolvent shortly after receiving favorable ratings from Demotech. Critics argue that the ratings process is overly favorable to insurers, allowing them to appeal downgrades and maintain a façade of stability.

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Critics, including climate finance strategist Jordan Haedtler, highlight the close ties between Florida's political leadership and the insurance industry, suggesting that this relationship has led to regulatory failures. A recent investigation revealed that the Florida Office of Insurance Regulation (OIR) may have suppressed reports indicating that many insurers were reporting losses while still providing substantial returns to shareholders. The Insurance Fairness Project has called for a comprehensive overhaul of Florida's insurance regulatory framework, advocating for better financial ratings and accountability mechanisms to protect consumers.

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Experts agree that Florida's insurance market requires significant restructuring to ensure long-term stability. Martin Weiss, founder of Weiss Ratings, emphasizes the need for a complete revamp of the insurance industry in Florida, advocating for a coordinated approach that integrates various regulatory functions. Without substantial changes, the cycle of reform and crisis is likely to continue, leaving homeowners vulnerable in the face of future disasters.

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• “What we need is a complete revamping of the structure of the insurance industry in Florida,” — Martin Weiss, Founder of Weiss Ratings

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• “Florida has a sort of uniquely acute history of having a very cozy relationship between its political leadership and the insurance industry,” — Jordan Haedtler, Climate Finance Strategist at Climate Cabinet

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• “Our main recommendation is to bring all these things together under one agency and to coordinate the actions of these different state instrumentalities to stabilize insurance markets long-term.” — Insurance Fairness Project Analysis

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