For the last several years, Florida’s property insurance story has read like a stress test: carrier exits, shrinking appetite, sudden non-renewals, and premiums that felt untethered from logic—especially for higher-value coastal homes and short-term rental (STR) portfolios.
Now, the narrative is changing.
Not because Florida got “less coastal” or hurricanes stopped forming—but because the market structure is finally improving: legal incentives have been rewritten, more capital is flowing back in, Citizens is shrinking, and new insurers are stepping onto the field. For buyers, sellers, and investors—particularly along lifestyle-driven, tourism-backed coastlines like the Emerald Coast—this is more than industry noise.
It’s a real variable in deal certainty, ownership costs, and long-term portfolio planning.
The headline: more insurers, more competition, more options
Florida’s Office of Insurance Regulation has publicly tracked a wave of admitted-market growth since the state’s major reform package. As of September 2025, regulators announced Stand Insurance Exchange and Praxis Reciprocal Exchange, marking the 16th and 17th property insurers to enter Florida’s market since the legislative reforms, with more than $574 million in combined policyholder surplus tied to these post-reform entrants.
That detail matters because surplus is the oxygen of underwriting. It signals capacity—more willingness to quote, compete, and scale—especially in markets that require specialized catastrophe modeling.
Why this is happening now: Florida rewired the incentives
Florida didn’t “talk” the market into improving. It changed the rules.
A core driver of the crisis wasn’t just weather—it was litigation economics. For years, Florida produced an outsized share of U.S. property insurance lawsuits, and that legal drag became a hidden tax inside premiums.
Reforms tackled the mechanics that fueled runaway claims behavior—most notably:
- Eliminating one-way attorney fee dynamics in many property claim disputes
- Restricting or eliminating assignment-of-benefits practices on new policies
- Tightening claim reporting and dispute timelines
- Pairing the legal reset with reinsurance-related stabilization programs and mitigation incentives
The result: fewer “games inside the game,” which lowers frictional loss costs and improves predictability—two things insurers require before they’ll commit real capacity.
Citizens is shrinking—and that’s a tell
When the private market seizes up, Citizens (the insurer of last resort) balloons. When private capacity returns, Citizens should retreat back into its intended lane.
That retreat is now measurable.
In a December 10, 2025 release, Citizens reported:
- Its policy count peaked around 1.42 million in October 2023
- It is expected to fall to ~385,000 by the end of 2025
- In 2025, Citizens’ depopulation program transferred more than 546,000 policies to private insurers
- Citizens also advanced 2026 rate recommendations reflecting an average statewide personal-lines decrease of 2.6%, with three out of five policyholders seeing an average premium reduction
This is one of the cleanest signals available: the market is regaining enough confidence—and enough carrier participation—to absorb risk that previously had nowhere else to go.
What this means for buyers and investors
For buyers and second-home investors, the win isn’t just “maybe lower premiums.” The real win is optionality—and optionality creates leverage.
Here’s where the improvement shows up in real life:
1) Better deal certainty (fewer insurance surprises late in escrow)
When markets tighten, insurance becomes a last-minute closing risk. More quoting capacity reduces that tail risk.
2) More nuanced underwriting for coastal assets
New and returning carriers often bring different appetites: newer construction, fortified features, mitigation-first models, higher deductibles with smarter pricing, and more flexibility around secondary occupancy.
3) Less forced reliance on last-resort structures
As Citizens shrinks, buyers regain the ability to build insurance programs that match the property’s true use (primary, second home, STR) and value profile.
4) A healthier investor math conversation
For STR owners, insurance is not a line item—it’s a yield variable. More competition means a more rational path to optimizing coverage vs. cash flow (without playing roulette with exclusions).
The market is improving—but sophistication still wins
This is not the moment to get casual. A “better” market isn’t the same thing as a “cheap” market, and Florida remains catastrophe-exposed by definition.
Three realities owners should keep front-of-mind:
- Carrier quality matters. Ratings, reinsurance structure, claims handling reputation, and financial strength are not academic details—especially after a major storm.
- Construction and mitigation documentation is currency. Roof age, wind mitigation credits, openings protection, elevation certificates where relevant—these reduce friction and often materially affect pricing.
- Portfolio strategy beats policy shopping. The smartest investors treat insurance like a program: deductible strategy, loss-of-use alignment, replacement cost realism, and clear STR use disclosure.
Practical next steps if you’re buying, selling, or rebalancing a portfolio
If you want to take advantage of the market’s improving direction—without getting exposed on the details—focus here:
- Start insurance conversations at the offer stage, not after inspection
- Request a clean documentation package: roof records, wind mitigation, 4-point, upgrades list
- Model deductibles intentionally (especially named-storm deductibles)
- For STRs: confirm policy form compatibility with rental activity and occupancy patterns
- Treat “cheapest” as a red flag—optimize for claims certainty and contract clarity
Bottom line: Florida’s insurance story is no longer one-dimensional
Florida’s property market has always been global in demand and local in complexity. Insurance is the bridge between the two.
The return of carriers—and the measurable retreat of Citizens—signals something bigger than headlines: a re-opening of capacity. For coastal real estate, that improves liquidity, improves transaction confidence, and helps investors underwrite Florida with a clearer lens.
It’s not a victory lap. It’s a shift.
And in real estate, the best opportunities usually appear right when the story starts to change—before the crowd realizes it has.
