Unique Florida Insurance Laws

January 24, 2025


Florida is known for its year-round sunshine, stunning beaches, and vibrant activities, making it one of the most desirable states to live in. It’s no surprise that nearly a thousand people move to the Sunshine State every day.

However, whether you’re new to the Sunshine State or just moving back after living elsewhere, the State of Florida has unique insurance laws for automobiles, homes and property.

Here’s what you need to know as you settle into life in this beautiful state. Florida requires every vehicle registered in the state to carry no-fault auto insurance coverage, so each driver has personal injury protection to cover injuries and property damage liability to cover damages regardless of who caused the accident.

From hurricanes to flooding, these challenges have led Florida insurance companies to design policies tailored to these common threats. While there’s no state law requiring homeowners to purchase insurance, most lenders insist on coverage as a condition for approving a mortgage. Keep in mind, some standard insurance policies in Florida might exclude certain risks, so you may need to explore additional riders or separate plans to ensure you’re fully protected.

No-Fault Automobile Insurance

Florida operates as a no-fault insurance state, one of only 12 in the United States with such laws. Specifically, Florida Statute § 627.736 mandates that drivers must carry PIP and PDL auto insurance, each with minimum coverage of $10,000. Drivers can choose a deductible of up to $1,000 for PIP and $500 for PDL. Before registering a motor vehicle with at least four wheels in Florida, proof of these coverages is required.

Despite these strict requirements, Florida has one of the highest rates of uninsured drivers in the nation, with 26.7% of drivers uninsured according to the Insurance Research Council. While not legally required, comprehensive and collision coverage can provide essential protection for your vehicle, safeguarding it against accidents as well as unexpected incidents like vandalism or weather-related damage.

Why is car insurance so expensive in Florida?

Florida consistently ranks among the top five states in various car accident categories. For example, in 2023, the state reported a staggering 394,945 car accidents for an average of 1,082 per day that resulted in 3,401 fatalities and 252,261 injuries. In addition, Florida ranks among the highest in the nation for uninsured and underinsured drivers. This exacerbates costs for insured drivers, as damages and medical expenses often fall back on insured individuals' policies.

Another contributing factor to Florida's high collision and comprehensive insurance rates is that Florida faces unique challenges when it comes to car insurance, largely due to its severe weather and high accident rates. Hurricanes and tropical storms frequently hit the state, causing extensive damage to vehicles and leading to a surge in insurance claims. This increased risk is reflected in Florida's higher car insurance premiums.

Homeowner Insurance Coverage Laws

Owning a home without homeowners' insurance is technically legal, but it’s rarely a practical choice. If you have a mortgage or a home equity loan, your lender will almost certainly require you to maintain insurance to protect their financial stake. Florida has unique considerations, while hurricane insurance isn't a standalone policy in the state, coverage for hurricanes is included in standard homeowners' policies. This built-in coverage is essential given susceptibility to severe weather.

The current homeowners' insurance crisis in Florida stems from a combination of factors and litigation challenges. These pressures have led many insurance providers to scale back their offerings or withdraw from the state altogether. It’s important to note that standard homeowners' policies do not cover flooding, including storm surges caused by hurricanes. To stay fully protected, homeowners can purchase insurance through the National Flood Insurance Program (NFIP).

What are the 2024 flood insurance mandates?

On May 13, 2024, significant changes to Florida's flood insurance requirements came into effect following Governor DeSantis's signing of a new bill. These changes primarily impacted policyholders with Citizens Property Insurance Corporation, a not-for-profit organization established by the Florida Legislature in 2002 to provide property insurance for residents and businesses unable to secure coverage through private insurers. 

Citizens Property Insurance plays a vital role in Florida's property insurance marketplace. As a tax-exempt government entity, it offers windstorm coverage and general property insurance. Unlike private insurers, Citizens is mandated to levy assessments on its customers if its funds fall short of covering claim payouts. By providing insurance to those unable to obtain private coverage, Citizens continues to be a critical safety net for Florida's property owners.

Florida Property Insurance Reforms

Florida recently implemented laws to restrict third parties from claiming policyholder rights related to property insurance. These regulations aim to lower property insurance costs by promoting quicker claims, faster settlements, and an emphasis on arbitration. Property insurance typically covers damages caused by specified weather-related incidents, along with protection against vandalism and theft for both the structure and its contents.

Under the state’s Assignment of Benefits laws, policyholders transferred their policy’s insurance benefits to a third party home improvement contractor, in exchange for services like roof repairs. The contractors would bill insurance company with inflated costs. If the insurance provider disputed the charges, third parties could pursue litigation. This cycle of inflated claims created costly legal disputes and drove property insurance costs up for consumers statewide.

What is Florida’s property law reform package?

Florida's property insurance market has faced significant challenges due to a complex litigation that prompted the state to take action. Governor Ron DeSantis and the Florida legislature introduced Senate Bill 2A, a comprehensive reform package aimed at reducing frivolous and costly lawsuits that have contributed to rising property insurance premiums statewide. Touted as a groundbreaking measure, SB 2A enacted significant changes to the insurance claims process.

  1. Since last year, SB 2A has introduced crucial reforms to protect policyholders in property insurance policies by prohibiting third parties from collecting and exploiting their rights. Key reforms include updated timelines for claim adjustments and payments and a ban on assignment-of-benefits agreements (AOB).
  2. Often unnecessary litigation stemming from the pursuit of attorneys’ fees allowed plaintiffs to recover their legal costs if they won their cases. This system made filing lawsuits for alleged breaches of insurance policies a low-risk endeavor, so SB 2A was enacted to amend laws and eliminate these attorneys’ fees for underlying claims. This reform aims to mitigate skewed incentives and reduce the volume of unnecessary lawsuits.

If you live in Florida, it's vital to understand that this is one of the most expensive states for homeowners' insurance and auto insurance premiums. While shopping for a cheaper policy may seem appealing, it’s essential to prioritize adequate coverage over potential savings. Cutting corners could expose you to significant financial risks. To make well-informed decisions, consider consulting a local independent insurance agent.

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An independent insurance agent at Nsurance Nation can help you assess your risk level, explain the specifics of Florida insurance laws, and connect you with policies tailored to meet your needs. The most affordable provider for your policies may vary as carriers do calculate the cost of premiums differently. So, it is important to always get multiple quotes that take advantage of the discounts being offered. Call us today at 1-833-450-9490. Our goal is to help you minimize unexpected costs with coverages you need to protect your assets.

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