Floridians for Lawsuit Reform announced that California has surpassed Florida as the highest-risk state for property insurers due to wildfires and litigation costs. This announcement was made on X, a social media platform.
According to a recent analysis by First Street Foundation, California’s increased risk is attributed to the growing severity and frequency of wildfires, alongside rising litigation costs. These factors have significantly altered risk assessments within the insurance industry, as reported by The Wall Street Journal.
Insurers in California are increasingly limiting coverage or withdrawing from wildfire-prone areas, resulting in tighter capacity and record-high premiums. The California Department of Insurance documented that the number of homes covered by California’s FAIR Plan, the state’s insurer of last resort, more than doubled from 140,000 in 2018 to over 272,000 in 2023. Industry experts note that litigation stemming from wildfire claims has also influenced insurers’ decisions to exit the market or increase prices.
Legislative reforms in Florida have led to changes aimed at reducing excessive litigation and attorney fees in the property insurance market. House Bill 837, enacted in 2023, addressed practices encouraging such litigations. A review by law firm Faegre Drinker indicated that these new laws curtailed the assignment of benefits and eliminated one-way attorney fees, which were seen as drivers of litigation abuse. Early data shows a notable decline in new property insurance lawsuits, suggesting positive effects on market stability.
According to its official website, Floridians for Lawsuit Reform is a non-profit advocacy organization focused on promoting legal reforms to reduce lawsuit abuse and stabilize Florida’s insurance markets. The group regularly publishes educational resources, supports legislative initiatives, and works to inform the public about issues affecting litigation and insurance. Its mission is to make Florida’s legal system fairer and more predictable for consumers, businesses, and insurers alike.
