Florida’s auto insurance rates are rising, and experts point to a surge in legal claims filed before tort reform took effect in mid-2023 as a key factor.
A new law passed last year reduced the statute of limitations for personal injury claims, shortening the time limit from four years to two years. Under the new law, most personal injury lawsuits related to accidents must be filed within two years or they will be dismissed.
While the law was intended to reduce the number of frivolous lawsuits, critics argue it led to a rush of older cases being filed, which is contributing to higher insurance rates.
Kim Jatich, broker-owner of Bradenton-based Quartz Coast Realty Inc., believes the change sparked an increase in claims that is affecting insurance costs.
“As a result, thousands and thousands of claims have been submitted last year before the statute of limitations ran out on the aging cases,” Jatich said on Facebook. “Settlements have increased. Insurance companies lost millions. The costs of those losses have been passed on to us the consumers. Sad.”
Before the law took effect, plaintiff law firms in Florida reportedly rushed to file tens of thousands of lawsuits. Lawyers noted they planned to file up to 25,000 cases in a final push to take advantage of the existing system.
At the time, critics argued that the flood of lawsuits underscored the need for reform, with insurance groups warning of the strain on the legal system and the potential for higher costs to consumers.
From March 2022 to March 2023, Florida led the nation in litigation, with 276 lawsuits filed per 100,000 people—more than double New York's rate. The surge in legal activity continued following changes in state law, with over 280,000 new cases filed in March alone, a 126% increase.
According to The Capitolist, the economic impact of the litigation is significant, costing the state over $40 billion, or 3.63% of its GDP, and prompting calls for further lawsuit reforms.