Does tort reform cut your insurance bill?

Excerpt, below from today's Wall St Journal (black font). New tort reform legislation in Florida has brought auto insurance rates down 10%. Litigation filed also dropped almost 90%. It's also helped with property insurance which still remains sky high because of the recent hurricane damage.

I did a little research below also (ClaudeAI).

Auto Insurance: Clear Success Story

Florida's tort reforms, particularly HB 837 signed in March 2023, have produced dramatic reductions in auto insurance rates. The results have been substantial:

Rate Decreases: Major carriers including GEICO, Progressive, and State Farm have filed for rate decreases of 10.5%, 8.1%, and 6% respectively . Among all insurers in Florida, the average rate increase dropped from 21% in 2023 to a projected 0.2% in 2025.

Litigation Reduction: The most striking impact has been on lawsuits. Litigation between plaintiffs and auto insurance companies over auto glass repairs dropped from 24,720 lawsuits in the second quarter of 2023 to 2,613 lawsuits in the same period of 2024 - a nearly 90% decline.

Key Reform Elements: HB 837 eliminated one-way attorneys' fees in insurance cases, shortened the statute of limitations for negligence from four years to two years, and modified the bad faith framework. The reforms also changed Florida from pure comparative negligence to modified comparative negligence, barring plaintiffs from recovery if they are more than 50% at fault .

Homeowners Insurance: More Complex Picture

The homeowners insurance market has shown improvement but remains challenging:

Mixed Results: While the reforms have helped, homeowners still face significantly higher costs than auto insurance policyholders. In 2024, Florida had the lowest average homeowners' premium increases in the nation, with statewide rates increasing by only 1% in 2024 and projected to rise by just 0.5% in 2025. However, these modest increases follow years of steep hikes.

Persistent High Costs: As of 2024, the average cost of homeowners insurance in Florida is approximately $11,759, significantly higher than the national average of around $2,377. Some sources report lower averages around $2,625-$5,400 depending on methodology, but all confirm Florida remains among the most expensive states.

Market Stabilization: The percentage of nationwide homeowners' insurance suits opened in Florida fell from 79.9% in 2018 to 71.5% in 2023 , and lawsuits filed against insurers during the first three quarters of 2024 declined by 23.8% compared to the same period in 2023 . Additionally, 11 new companies have entered the market over the past two years, with more than 477,000 policies returning to the private market since 2022.

Key Differences

Why the disparity? Auto insurance reforms targeted specific, abusive litigation practices like assignment of benefits for glass repairs that were easy to eliminate. Homeowners insurance faces additional structural challenges:

1. Natural Disaster Risk: Florida's hurricane exposure drives costs independent of litigation issues

2. Reinsurance Costs: Property insurers face expensive reinsurance markets that haven't fully adjusted yet

3. Prior Damage: Without taking reform into account, Citizens Property Insurance's uncapped indicated rate increase would have been 89% for 2024 policies, but after factoring in litigation cost reductions, that dropped to 55% - still substantial

4. Market Recovery Time: The reforms are working, but the property insurance market was in far worse shape and needs more time to fully stabilize.

The tort reforms have clearly succeeded in reducing auto insurance rates through litigation reduction. Homeowners insurance has stabilized and is improving, but the combination of natural disaster exposure and years of prior market dysfunction means full recovery will take longer, even with effective reforms in place.

Florida Gov. Ron DeSantis’s litigation reforms are starting to pay off for the state’s citizens in a big way. Auto and home insurers are announcing rate cuts—and get this—even issuing rebates.

State Farm said recently it will reduce auto rates in the Sunshine State by 10%. Combined with last year’s premium cut, its policyholders will save $400 a year on average. The Florida Office of Insurance Regulation says the state’s five largest auto insurers have reduced rates by 6.5% on average this year, saving policyholders hundreds of dollars.

Progressive Insurance also plans to send policyholders refunds averaging about $300. “Since Florida insurance reform was enacted in early 2023, we have seen lower loss costs on certain types of personal auto accident claims and favorable reserve development, and we have experienced strong profitability in our Florida personal auto business,” Progressive said. Its total auto refunds add up to nearly $1 billion, Mr. DeSantis said.

Republicans in 2023 passed a raft of tort reforms cracking down on lawsuit abuse. They were controversial at the time, and even some GOP lawmakers were skittish. But Mr. DeSantis persevered.

The state eliminated one-way attorney fees, which let plaintiffs collect massive attorney fees from defendants and their insurers if they win a lawsuit—though not the other way around. Republicans also curbed a common practice by which attorneys inflated medical costs for injuries caused by car accidents.

In 2022 Republicans shored up the state’s sinking home insurance market. Insurers were inundated by lawsuits, causing many to fail or flee the market. The state-created Citizens Property Insurance Corp. had become the state’s biggest property insurance. Legal reforms stopped unscrupulous contractors and plaintiff attorneys from jacking up claim costs.

As a result, home insurers are cutting rates and writing more policies in the Sunshine State. Since January 2024, 33 insurers have filed for rate decreases, and 17 new insurance companies have entered the market. Florida Peninsula Insurance Company, one of the state’s largest insurers, this summer filed for a 8.4% statewide rate cut on homeowners.

By contrast, tenant and household insurance costs have risen 7.5% on average nationwide over the past 12 months. Republicans searching for an affordability agenda might take note of Mr. DeSantis’s tort reforms. States are primarily responsible for regulating insurance and liability, and Florida shows that tackling thorny problems can pay dividends with some political patience. There are better ways than government handouts for politicians to put more money back into people’s wallets.