By Lewis Nibbelin, Analysis Author, Triple-I
Texas lawmakers struggling to ease the state’s rising insurance coverage prices would possibly discover helpful insights from Florida’s sustained dedication to authorized system abuse reform.
In recent times, Florida led the nation in claim-related litigation, accounting for 72 % of householders’ insurance coverage lawsuits regardless of representing solely 10 % of householders’ claims. This disparity fueled escalating premium charges and a multi-year insurer exodus, steering state lawmakers towards litigation reforms in 2022 and 2023. These reforms, amongst different issues, curtailed one-way lawyer charges and task of advantages (AOB) for property insurance coverage claims.
Submit-reform, dozens of householders’ and auto insurers have filed for premium reductions within the state, with some carriers submitting cumulative reductions of greater than 20 %. Renewed market competitors from the 18 new property insurers within the Sunshine State additionally facilitated the bottom variety of insurance policies administered by Residents Property Insurance coverage Corp. – the state-run insurer of final resort – in over a decade, at a 50 % drop final yr from 2024 as a consequence of profitable depopulation to the personal market.
Florida’s rising stability displays a gradual lower in nuclear verdicts (awards of $10 million or extra) and claims-related lawsuits, with each month of 2025 reporting a continued decline in newly filed litigation in comparison with the identical month the earlier yr, the state governor’s workplace mentioned in a assertion.
Texas insurance coverage premiums spiral
In contrast to Florida’s trajectory, Texas as soon as set the gold commonplace for a good and balanced court docket system, main with a sequence of Nineties and early 2000s reforms that included a $250,000 cap on noneconomic damages in medical malpractice circumstances. Whereas this laws stays intact, continued efforts have stalled below repeated legislative challenges to preexisting and proposed reforms.
Final yr’s failed state Senate Invoice 30as an example – based mostly on an analogous Florida measure – aimed to limit “phantom damages” by displaying juries the precise quantity paid for medical payments, relatively than an inflated quantity decided by a healthcare supplier’s checklist costs. Such quantities contribute to outsized injury awards within the state, which hosted the highest quantity of U.S. nuclear verdicts in 2024.
Insurers should account for these added prices when setting charges, resulting in a 19 % enhance in common Texas owners’ insurance coverage charges in 2024 after a 21 % spike in 2023, in line with Texas Division of Insurance coverage information. Analysis from the Insurance coverage Analysis Council – an affiliate of The Institutes, like Triple-I – ranked Texas because the sixth least reasonably priced state for owners’ insurance coverage in 2022, with owners on common paying 3.13 % of median family earnings for protection.
These traits earned Texas a spot on the American Tort Reform Basis’s (ATRF) annual “Judicial Hellhole” watch checklist final yr, which highlighted “a wave of industry-targeted lawsuits” inside the state. Noting that extra litigation additionally prices Texans a mean of $1,724 every year, ATRF president Tiger Joyce argued “Texas courts are in jeopardy — and it’s hardworking households who pay the worth for lawsuit abuse.”
Texas policymakers would do nicely to construct on the state’s monitor document of significant reform and proceed pushing for laws modeled on Florida’s success. As a result of the Texas Legislature is not going to meet once more till January 2027, the Lone Star State will stay a troublesome litigious atmosphere for defendants and insurers alike for a while.
Be taught Extra:
Florida Premiums Drop Amid Submit-Reform Stability
Triple-I Authorized System Abuse Consciousness Marketing campaign Enters California, Illinois
Take Care in Addressing Owners’ Premiums, Bloomberg Cautions Policymakers
Litigation Reform Works: Florida Auto Insurance coverage Premium Charges Declining
Triple-I Transient Highlights Authorized System Abuse and Lawyer Promoting
