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Florida vs. California Insurance, Round 2

WSJ, February 17, 2025

What happened: California’s insurance market is collapsing due to price controls and regulatory burdens, while Florida’s legal reforms have stabilized its market and lowered insurance rates.

California’s crisis: Insurance Commissioner Ricardo Lara imposed a $1 billion surcharge on insurers and policyholders to prop up the failing state-backed insurer, FAIR, which is in danger of becoming insolvent.

Florida’s success: Florida’s 2022-2023 litigation reforms curbed “rampant lawsuit abuse” and helped head off an insurance disaster. In fact, these tort reforms helped attract 11 new insurers to the state and shift 477,000 policies from the state-backed Citizens Property to the private market. 

  • As a result, major insurers have begun lowering rates, and auto insurance premiums are also declining.

TLR Thoughts: Florida’s success highlights the benefits of state-level solutions. TLR supports maintaining state authority over insurance regulation, but that has to be coupled with a legal environment that does not reward plaintiff lawyers for pursuing meritless lawsuits that cost all Texans money through increased costs for goods and services.

Read the full article here.