The Florida Insurance Guaranty Association recently voted to terminate a 1% emergency assessment on all Florida homeowners and business property and casualty policies two years early.
This is expected to save Florida homeowners and businesses up to $650 million over the next two years—or about $31 a year for the average homeowner.
The assessment was introduced on Oct. 1, 2023, to repay bonds issued by the Florida Insurance Assistance Interlocal Agency to cover unearned premium refunds and storm-related property insurance claims after 10 homeowners insurance companies in the state became insolvent.
The 1% assessment will still be charged on policies renewing through Sept. 30, 2026, but will terminate on Oct. 1, 2026.
Florida Insurance Commissioner Michael Yaworsky told Realtor.com®, “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.”
In 2022, Florida overhauled its property insurance laws with several measures aimed at cutting litigation costs, restricting assignments of benefits, and tightening claims timelines.
“Because of substantial legislative reform which addressed a Florida risk crisis driven by legal system abuse and assignment of benefits claim fraud, the state’s property insurance market has stabilized and is in its strongest fiscal position in a decade,” Mark Friedlander, senior director of media relations for the Insurance Information Institute, tells Realtor.com. “This enabled FIGA’s board to end the policyholder assessment two years earlier than planned.”
“It is always a good day when we can announce that Florida families will see a reduction in their insurance premiums, and this announcement is a huge win for Florida’s policyholders. When an insurance company goes insolvent, it not only hurts its policyholders, but it also hurts all policyholders in the state of Florida. Floridians can rest assured knowing that we will continue to hold insurance companies accountable,” Florida Insurance Guaranty Association CFO Blaise Ingoglia said in a statement.
Insurance prices still sky-high in Florida
Despite this surcharge being terminated, Florida remains one of the most expensive states for insuring homes and other properties due to the elevated disaster risk from hurricanes.
Florida real estate agent Cara Ameer tells Realtor.com, “Insurance costs in Florida have gotten extremely expensive, and have certainly had an impact on buyers’ purchasing power and affordability.”
The average annual homeowners insurance premium in Florida, including wind coverage, is now $3,815, according to the Florida Office of Insurance Regulation.
That’s up about 6% from a year ago.
This data backs up findings from the Realtor.com Housing and Climate Risk Report, which found homes in five Florida metropolitan areas rank among the top 10 markets with the highest insurance burdens.
Would-be buyers are doing their homework
Homeowners insurance costs are becoming a bigger consideration for prospective buyers.
“It used to be ‘how new is the kitchen?’ and now it’s ‘how old is the roof?’ A newer roof is insurable, and older ones may not be. It doesn’t matter how sexy the kitchen is if you can’t obtain the house,” Palm Beach real estate broker Jeff Lichtenstein, CEO of Echo Fine Properties, tells Realtor.com.
Ameer says the buyers she works with are certainly scrutinizing insurance costs before making any decisions. “They definitely want to know a ballpark estimate of what they’re looking at based on the information that we can find out about the home prior to making an offer,” she explains.
Florida real estate agent and investor Ron Myers of Ron Buys Florida Homes tells Realtor.com, “I have had buyers back out of deals once they got the final insurance quote and realized the monthly payment was no longer affordable. I have also seen homeowners decide to sell because rising insurance, taxes, and HOA fees [are] just too much to carry.”
Myers says while the insurance surcharge being terminated is good news, it’s “not a game changer.”
“Saving around $31 a year is better than nothing, but it does not solve the bigger insurance problem in Florida,” he explains. “While any relief is welcome, buyers and sellers are still feeling a lot of pressure from insurance costs here in Florida.”