A few years ago, Florida’s insurance market was on the verge of collapse. Homeowners faced skyrocketing premiums, insurers were going bankrupt or fleeing the state, and Citizens, the state-backed insurer of last resort, was growing at an unsustainable pace.

The problem wasn’t hurricanes or bad luck — it was a broken legal system that incentivized fraud and endless lawsuits, threatening homeownership and the broader economy.

Then, in a rare moment of political clarity, Florida lawmakers acted. Between 2019 and 2022, they enacted sweeping reforms to stabilize the market. They took on the trial bar, curbed predatory lawsuits, and eliminated one-way attorney fees that had turned Florida into the lawsuit capital of the country.

The result? The insurance market began to recover.

But now, some want to roll back these reforms. That would be a mistake. If Florida needs a cautionary tale, it should look no further than California.

For years, California has buried its insurance market under layers of regulation, making it nearly impossible for insurers to operate sustainably. The state prohibits insurers from using predictive risk modeling, meaning they must base rates on outdated historical data rather than account for rising wildfire risks. The process for rate approvals can take years, forcing companies to either write policies at a loss or exit the market entirely. Many have chosen the latter.

The result? Insurers are abandoning California, leaving homeowners with fewer choices and higher premiums. Hundreds of thousands of policyholders have been forced into the California FAIR Plan, the state-run insurer of last resort, which was never designed to handle this level of demand. As the private market shrinks, the burden on the FAIR Plan grows, pushing costs even higher.

California’s challenges aren’t just about regulation. The state faces rising wildfire risks and soaring rebuilding costs, making home insurance more expensive. However, instead of adapting, California has doubled down on outdated policies that make it even harder for insurers to operate. That’s why well-established insurers like State Farm and Allstate have stopped writing new policies in the state.

This isn’t consumer protection. It’s a slow-motion collapse of the state’s insurance system, driven by policies that ignore economic reality.

Florida, by contrast, has spent years digging itself out of an insurance crisis. In 2022, only 16,000 policies moved from Citizens back into the private market. By 2024, that number had surged to 477,000 — a nearly 3,000% increase. Insurance lawsuit filings have dropped by nearly 70%, reducing one of the biggest cost drivers of higher premiums.

These reforms didn’t just happen. They required political courage, standing up to entrenched interests that benefited from the old system. But now, those same interests want to unwind these policies, claiming they went too far. If they succeed, Florida will be right back where it started.

There’s another piece of the puzzle that often goes unnoticed: reinsurance.

Florida insurers rely on reinsurance — essentially, insurance for insurance companies — to spread the risk of major storms. Most of this reinsurance comes from global markets, where investors constantly evaluate risk. These companies are not charities; they will raise rates if they believe Florida’s legal and regulatory environment is becoming unstable again.

Since Florida’s reforms, reinsurers have responded positively, providing more affordable coverage to primary insurers. But if policymakers reverse course, it would send a clear signal to reinsurers that Florida is returning to its old ways — giving them an excuse to hike rates. Those costs would be passed directly to homeowners.

Florida either sticks with policies that stabilize the market or follows California’s path into crisis. The state must avoid overregulation that drives insurers out and forces homeowners into state-backed coverage. A thriving market requires competition, stability, and predictability, not artificial price controls that distort incentives.

Florida lawmakers took bold action to fix the insurance crisis. Now, they need to have the discipline to stay the course. The reforms are working. The system is stabilizing. The momentum is real.

The worst thing Florida could do now is throw it all away.

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Former state Sen. Jeff Brandes is the founder and president of the Florida Policy Project.

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