By Giulia Carbonaro
Florida homeowners will soon see relief on their insurance bills as the state is ending a 1 percent insurance surcharge, introduced in 2023, two years ahead of schedule.
While residents still pay some of the highest home insurance premiums in the country, the decision announced last week by the Florida Insurance Guaranty Association (FIGA) is yet another sign that the Sunshine State is out of the crisis that nearly brought the sector to its knees during the pandemic.
What Is the Surcharge Floridians Are Getting Rid Of?
After several insurers in Florida became insolvent due to a combination of excessive litigation, widespread fraud, and more frequent and more devastating extreme weather events, FIGA’s board approved a 1 percent emergency assessment on March 31, 2023 to fund claims from the liquidation of United Property & Casualty Insurance Company.
In an effort to stabilize the shaky markets, the Florida Office of Insurance Regulation then ordered companies to begin collecting a 1 percent surcharge from policyholders on most property policies. Insurers started collecting the emergency assessment in October of the same year and sending the money to FIGA.
The surcharge was “necessary to secure funds for the payment of covered claims, to pay the reasonable costs to administer such claims, including claims resulting from insurance companies that have become insolvent or may become insolvent as a result of losses incurred due to hurricanes including, but not limited to Hurricanes Irma, Michael and Ian, and to secure bonds issued to generate revenues to pay claims,” FIGA executive director Corey Neal wrote in an April 4 letter to then-insurance commissioner Mike Yaworsky.