Understanding Florida’s Property Insurance Crisis in 2025
Florida’s property insurance market has reached a breaking point. Homeowners across the state, from Tampa and St. Petersburg to Miami and Jacksonville, face insurance premiums that are nearly triple the national average. For many families, property insurance has become unaffordable, forcing difficult decisions about coverage, home ownership, and financial security.
Florida Property Insurance Rates: By the Numbers
The statistics paint a stark picture of Florida’s insurance affordability crisis:
- Statewide average premium: $3,668 per year (as of September 2024)
- National average: $2,300 per year
- South Florida (Broward County): $6,291 per year
- South Florida (Miami-Dade County): $6,170 per year
- Citizens Property Insurance policyholders: Over 1.2 million Floridians now rely on the state-backed insurer of last resort
For years, insurance companies have blamed these skyrocketing rates on a familiar list of factors: Florida’s hurricane exposure, excessive litigation, and widespread fraud, particularly related to roofing claims. State legislators responded with reforms in 2022 and 2023 designed to reduce lawsuits and limit policyholder protections.
But a previously hidden state report tells a different story, one where insurers weren’t merely struggling to survive but actively shifting billions of dollars to affiliated companies while claiming poverty.
The Hidden 2022 Report: $14 Billion in Insurance Company Affiliate Transfers
In early 2025, investigative reporting by the Miami Herald and Tampa Bay Times revealed a bombshell: Florida’s Office of Insurance Regulation (OIR) had commissioned a comprehensive analysis of insurance company financial practices in 2022 and never shared the findings with state legislators or the public.
What the 2022 Insurance Report Found
The report examined financial relationships between Florida-based insurance companies and their corporate affiliates. The findings were, in the words of insurance industry watchdog Doug Quinn of the American Policyholder Association, a “smoking gun.”
Key Findings: 30 Florida-Based Insurers (2017-2019)
- Insurance company losses: $432 million net loss
- Affiliate company profits: $1.8 billion net income
- Shareholder dividends: $680 million paid out during this period
The Full Picture: All 53 Florida Insurance Companies
When researchers expanded their analysis to include all 53 insurance companies operating in Florida, the disparity became even more dramatic:
- Insurance company net income: $61 million
- Affiliate company profits: Nearly $14 billion
This means that while insurers claimed financial hardship, they quietly funneled money into their affiliated businesses to avoid financial scrutiny and justify premium increases. The study’s author found that nearly two-thirds of the examined insurers had affiliate relationships that weren’t “fair and reasonable” under state law, a vague standard that’s never been clearly defined. Worse, this practice left many insurers financially fragile, teetering on the edge of insolvency just as Florida’s insurance crisis deepened.
Florida homeowners were told litigation and fraud were the culprits, yet the data showing billions flowing to affiliates was hidden from the public and lawmakers alike. It’s hard not to wonder if some regulators, caught in the revolving door between government and industry, had a hand in keeping this quiet.
Why Did Florida Regulators Suppress This Report?
The Florida Office of Insurance Regulation has faced intense criticism for keeping this analysis under wraps. When questioned by journalists, OIR defended its decision, stating: “Our office does not release every internal analysis of companies to the Legislature.”
This explanation has not satisfied critics. Birny Birnbaum, executive director of the Center for Economic Justice, called the affiliate profit numbers “eye-popping” and questioned why regulators failed to alert lawmakers to the practice before legislative reforms that primarily targeted policyholder rights and litigation.
The full report remains difficult to access, reportedly available only for a $1,500 fee, leading to accusations that the state is shielding the insurance industry from public scrutiny.
How the Insurance Affiliate Loophole Works in Florida
Understanding the affiliate scheme requires knowing how insurance company profits are regulated and where the system breaks down.
Florida’s 4.5% Profit Cap on Insurance Companies
Florida law limits the amount of profit that property insurance companies can earn to approximately 4.5% of premiums. This regulation exists to protect consumers from excessive rate increases and ensure that premium dollars actually go toward paying claims.
However, this profit cap applies only to the insurance company, not to affiliated companies owned by the same corporate parent.
The Affiliate Transfer Scheme Explained
Here’s how the system works in practice:
- Step 1: Insurance companies collect premiums from Florida homeowners
- Step 2: Instead of retaining these funds for claims, insurers pay substantial fees to affiliated companies for services like claims management, policy administration, IT services, and marketing
- Step 3: The affiliate companies that are not subject to the 4.5% profit cap report massive profits
- Step 4: The insurance company reports minimal profits or even losses, justifying requests for rate increases
- Step 5: Regulators approve rate hikes based on the insurer’s apparent financial struggles
The result? Premium dollars that homeowners believe are paying for insurance coverage instead flow to corporate affiliates with no oversight, while families face ever-increasing rates.
Why Affiliate Fees Are Often “Unreasonable”
The 2022 report found that 19 of 30 Florida-based insurers were paying “unfair and unreasonable” fees to their affiliates.
Common problems include:
- Percentage-based fees: Many affiliate fees are calculated as a percentage of premiums. When premiums rise, affiliate payments automatically increase, creating a perverse incentive to raise rates
- Inflated service costs: Affiliates often charge well above market rates for services that could be obtained more cheaply from unrelated vendors
- Overlapping services: Multiple affiliates may be paid for similar or redundant services
- Lack of transparency: Complex corporate structures make it difficult for regulators to track money flows
How Does This Impact Florida Property Owners and Their Insurance Claims?
At Williams Law Association, P.A., we see the real-world consequences of Florida’s insurance crisis every day in our Tampa office. The affiliate transfer scheme isn’t just an abstract financial scandal; it directly harms homeowners trying to protect their families and property.
A Case Study: Consider one of our Fort Myers clients whose annual premium jumped from $2,800 to $5,100 over just two years. Their insurer blamed “market conditions” and simultaneously dropped windstorm coverage from their policy. The family was forced to obtain separate windstorm coverage through Citizens Property Insurance at an additional cost, further increasing their total insurance expenses.
This story is not unique. Our firm has helped thousands of Florida homeowners facing similar situations: premium increases of 50%, 80%, even 100% or more, combined with reduced coverage and increasingly aggressive claim denials.
Insurers Blame Fraud, But Homeowners Know Better
Insurance companies frequently blame “fraudulent roofing claims” and “excessive litigation” for the crisis. While abuse exists, this narrative ignores a critical fact: many insurers mismanaged risk, under-reserved funds, and failed to honor policies long before litigation surged.
Bad Faith Insurance Practices Are Rising:
- Unjustified delays in property inspections and payments
- Lowball repair estimates far below fair market value
- Denials based on ambiguous policy exclusions
- Use of biased engineering reports to reject claims
- Non-renewals immediately after filing a claim
We continue to see insurers acting not in good faith, but in calculated self-interest. Homeowners are left to fight massive corporations for fundamental contractual rights.
The Real Cost to Floridians
This isn’t just a numbers game; it’s personal. Every time your premium spikes and a claim is denied, there’s a chance it’s tied to this scheme. Insurers use their “losses” to justify rate hikes, even as their affiliates thrive. When they drain their coffers to pay affiliates, they’re less able to honor your claims, leaving you stranded after a storm. And when they go insolvent, as companies like Fed Nat and Southern Fidelity did in 2022. Policyholders are left scrambling for new coverage in a shrinking market.
Take Southern Fidelity, for example. Before its collapse, it was linked to affiliates that spent nearly half a million dollars yearly on a hunting lodge. That’s your premium money at work, not paying claims but funding executive perks. Meanwhile, Citizens Property Insurance, the state-backed “insurer of last resort,” has ballooned to over 847,000 policies, with rates still climbing despite recent reductions in some areas.
What’s Next for Florida Homeowners?
Florida’s insurance crisis has been worsening for years, with homeowners paying the highest property insurance rates in the country. While state lawmakers have attempted reform, the recent findings demand a stronger response. This scandal is finally getting attention. Florida House Speaker Daniel Perez has ordered hearings with subpoena power to conduct a deeper investigation. The Florida Office of Insurance Regulation has also requested increased oversight, proposing flat fees for affiliates rather than percentages that increase with each premium hike.
Proposed Reforms on the Table:
- Defining “Fair and Reasonable” Fees for Affiliates: Regulators are urging lawmakers to clarify what constitutes “fair and reasonable” when insurers pay fees to their affiliates. This could help close the loophole that allows insurers to shift money unchecked.
- Changing How Affiliate Fees Are Paid: Affiliate payments are often based on a percentage of premiums, meaning that as premiums go up, affiliates get paid more. A proposed reform would require insurers to pay affiliates a fixed dollar amount, rather than preventing them from profiting when homeowner rates increase.
- Increased Transparency & Oversight: Given the length of time this report was kept secret, there are growing calls for greater transparency in how insurance companies and their affiliates report their financial information. Homeowners deserve to know how their money is being used.
Without decisive action, insurers may continue to exploit these affiliates, leaving Floridians to pay the price. The newly published details serve as a poignant reminder that transparency is essential for adequate consumer protection.
Conclusion: Fighting Back Against Florida’s Insurance Crisis
The revelation that Florida insurance companies have been funneling billions of dollars to affiliates while raising premiums and denying claims represents more than a financial scandal; it’s a betrayal of the homeowners who depend on insurance to protect their families and property.
For too long, insurers have pointed fingers at fraudulent contractors and litigious policyholders while quietly enriching their corporate affiliates. The suppressed 2022 report exposes what many Florida homeowners have long suspected: the insurance crisis isn’t just about hurricanes and lawsuits, it’s also about corporate greed operating within a system that lacks adequate oversight.
At Williams Law Association, P.A., we’ve spent over 30 years fighting for Florida homeowners against insurance companies that prioritize profits over people. If your property insurance claim has been wrongfully denied, unreasonably delayed, or unfairly underpaid, you don’t have to accept it.