FIGA Moves to End 1% Assessment for Insolvent Insurer Claims 2 Years Early

Why It Matters

Ending the surcharge signals a stabilizing Florida property‑casualty market and delivers substantial direct savings to consumers, reinforcing confidence in the state's insurance safety net.

Key Takeaways

• Assessment ends Oct. 1, saving $650M
• Average policyholder saves $31 per year
• Florida market stabilizes after 2022 reforms
• FIGA paid $2.1B claims in five years
• No new insurer insolvencies in 2025 season

Pulse Analysis

The Florida Insurance Guaranty Association was created in 1970 to protect policyholders when insurers become insolvent, using a combination of remaining insurer assets and policy assessments. The 1% emergency assessment, first imposed in March 2023, was a response to a wave of insurer failures and aggressive litigation that left millions of claims unpaid. By shouldering the financial burden, FIGA helped maintain market continuity and prevented a cascade of consumer losses during a turbulent period for Florida’s property‑casualty sector.

Legislative reforms enacted in late 2022—most notably the repeal of one‑way attorney fees and restrictions on assignment‑of‑benefit agreements—have dramatically reduced frivolous claims and litigation costs. These changes, coupled with a relatively quiet 2025 hurricane season, eliminated the need for additional bond financing and allowed FIGA to reassess its financial posture. The early termination of the assessment reflects the effectiveness of those reforms and signals to insurers and investors that the regulatory environment is now more predictable and supportive of sustainable underwriting.

For policyholders, the cessation of the 1% surcharge translates into tangible savings—up to $650 million statewide, or about $31 per household each year. This relief not only eases the cost of homeownership but also restores confidence in the insurance market’s ability to deliver on claims without resorting to emergency levies. As the market continues to stabilize, stakeholders can anticipate a more resilient insurance ecosystem, potentially attracting new capital and fostering competitive pricing for Florida residents.