Mexico Beach, Florida, United States October 26, 2018. 16 days after Hurricane Michael, Canal Park The law, which Gov. Ron DeSantis quickly signed, made a series of changes to try to reduce litigation costs. Those changes included eliminating what are known as “one-way attorney fees.” (Credit: Terry Kelly/

Florida lawmakers last week made changes that will provide “much needed relief” in the troubled property-insurance system, but effects of the legislation won’t be immediate, the AM Best financial-rating agency said in a new report.

The report pointed to parts of the new law designed to curb litigation, which insurers have long blamed for driving up costs. But it also cited underlying issues in the system, such as national insurance companies being leery of doing business in the state and Florida carriers being heavily dependent on reinsurance.

Reinsurance, which is critical backup coverage, has become more expensive and difficult for Florida insurers to buy — with costs passed along to homeowners. The law approved during a special session last week included steps such as providing $1 billion for a temporary program to help insurers get reinsurance coverage.

“The five largest national homeowners insurers account for over 50% of the U.S. market outside of Florida, but just 15% of the market in Florida, demonstrating just how dire the situation is,” Sridhar Manyem, senior director, industry research and analytics for AM Best, said Tuesday in a prepared statement accompanying the report. “The legal environment and reinsurance market are two significant issues addressed by the special session that may ultimately make the market more attractive, but the effectiveness of reform will require time.”

The law, which Gov. Ron DeSantis quickly signed, made a series of changes to try to reduce litigation costs. Those changes included eliminating what are known as “one-way attorney fees,” which have required insurers to pay the attorney fees of policyholders who successfully file lawsuits.

Also, the law eliminated the long-controversial practice of assignment of benefits for property-insurance claims. Assignment of benefits involves policyholders signing over claims to contractors, who then pursue payment from insurers. Insurers contend the practice has led to increased lawsuits.

The AM Best report said that if “these measures prove effective, they could significantly lower insurers’ defense and cost containment expenses.” It also said the changes “will bring about much needed relief, but such relief is unlikely to be immediate.”

Among other things, the report said the law is likely to draw court challenges.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.


  • All news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including and

Already have an account?



Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join now!

  • Unlimited access to - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including, and
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2023 ALM Global, LLC. All Rights Reserved.