The 2025 Florida legislative session is in full swing, and a flurry of proposed bills is poised to reshape the insurance landscape in profound ways. From sweeping reforms in Senate Bill 554 to a host of new proposals targeting property insurance claims, litigation financing, and insurer practices, these measures could hit insurers operating in Florida with increased compliance costs, heightened scrutiny, and a more contentious claims and litigation environment. While many of these bills are pitched as consumer protection lifelines, the reality for insurers may be a tangle of unintended consequences—higher operational costs, liquidity risks, and a surge in disputes. At Wood Smith Henning & Berman, we’re tracking these proposals closely to keep you informed and prepared.
SB 554: A Regulatory Overhaul with Teeth
Florida Senate Bill 554, still winding through committee reviews, remains a cornerstone of this session’s insurance reform efforts. If enacted, it takes effect July 1, 2025, and promises a heavy dose of regulatory oversight. The Office of Insurance Regulation (OIR) would gain expanded powers to scrutinize rates, deeming them excessive, inadequate, or unfairly discriminatory based on factors like past and projected losses (inside and outside Florida), operational expenses, market competition, investment income, reinsurance costs, and state-approved hurricane modeling. The OIR could even nix rates tied to reinsurance purchases for catastrophic events—a move that might discourage smart risk management in a state prone to storms.
The bill doesn’t stop there. It demands annual public disclosures of insurer financial relationships and executive compensation—think affiliated entities with 10% common ownership, detailed transaction breakdowns, and executive pay packages laid bare for all to see. Trade secret protections? Gone. This transparency could expose insurers to competitive risks and public backlash, especially if the OIR uses this data to challenge rate hikes or flag compliance issues. Add in stricter claims handling rules—written estimates within seven days, electronic itemized breakdowns updated monthly, and seven-year record retention—and SB 554 is a compliance beast.
Mediation gets a makeover too. Policyholders must be informed of their mediation rights at every turn—issuance, renewal, or claim filing—and disputes head to mandatory mediation (costs split evenly) before litigation. But if insurers miss the 90-day claims investigation window, mediation’s off the table, giving policyholders a fast track to court. Pre-suit notices add another layer: insurers must respond within 10 days to a claimant’s settlement demand—accept, counter, or decline—or face immediate litigation risks. These provisions could fuel bad faith allegations and drag out disputes, leaving insurers vulnerable.
SB 1508 and HB 1087: Property Claims Get a Radical Rewrite
Enter SB 1508 and HB 1087, companion bills from Senator Tom Leek (R-Ormond Beach) and Rep. Randy Maggard (R-Dade City) that toss out the current mediation option for residential property claims and replace it with a mandatory state-run process. Disputes would land in the Division of Administrative Hearings (DOAH), bypassing courts, appraisals, and arbitration entirely. The goal? Streamline claims and restore normalcy post-loss while keeping insurer costs “reasonable.” The reality? It’s a game-changer with big risks.
Here’s how it works: either party can trigger the DOAH process for unresolved claims. No lawyers required, but petitioners must certify a good-faith effort to resolve the dispute and provide detailed info—names, contacts, loss descriptions, alleged insurer missteps, damage estimates, and specific issues for the judge to tackle. If the petition’s sloppy, it’s dismissed without a hearing. Insurers then have 14 days to pay up or respond, explaining any nonpayment. The DOAH judge rules within 60 days, following streamlined procedures in F.S. 25. This applies to material fact disputes but skips fraud suspicions, coverage denials, or misrepresentation cases.
The kicker? These bills make homeowners’ insurance the primary policy, even if separate flood or wind policies exist. Insurers must pay upfront and chase subrogation later—potentially from the slow-moving National Flood Insurance Program. Forcing private insurers to front flood losses could strain cash flow, spike premiums, and spook reinsurers and investors in an already shaky market. Plus, losing appraisal and arbitration safeguards might unleash a litigation flood instead.
HB 451: Undoing Tort Reform and Piling on Transparency
Rep. Alex Andrade (R-Pensacola) and Senator Don Gaetz (R-Pensacola) bring HB 451 (paired with parts of SB 554), which rolls back the 2023 tort reform gains from HB 837. Remember the elimination of one-way attorney fees? That’s out the window. The bill jacks up court judgment interest rates from 400 to 800 basis points and mirrors SB 554’s transparency push—public OIR reports on insurer business ties and executive pay, no trade secret shield, and using that data to grill rate hikes. Claims adjustments get stricter too: electronic estimating software is mandatory, manual changes need documentation and seven-year retention, and reinspections before mediation are banned.
Dispute resolution gets thornier. Pre-suit demands require insurers to accept, counter, or decline, followed by mandatory mediation (split costs). Attorney fees hinge on how close the judgment lands to the demand—80%+ gets full fees, 20%-80% is proportional, under 20% gets nothing—unless bad faith or deadline violations kick in. Insurers offering arbitration discounts must show the dollar amount upfront. Effective July 1, 2025, this bill could resurrect plaintiff attorney windfalls and complicate claims handling.
HB 1551 and SB 426: Attorney Fees Strike Back
Rep. Hillary Cassel (R-Dania Beach) and Senator Jonathan Martin (R-Fort Myers)—both attorneys—push HB 1551 and SB 426 to undo more of HB 837’s 2023 reforms. SB 426 mandates attorney fees for the prevailing party in admitted and surplus lines cases and lets plaintiffs seek declaratory judgments post-reservation of rights but pre-denial. HB 1551 axes the declaratory judgment fee cap from 2023. If these pass, expect a plaintiff-friendly litigation surge.
SB 230: Bad Faith Claims Get a Leash
Senator Keith Truenow (R-Tavares) offers SB 230 to tighten bad faith rules post-2022 reforms. No more bad faith claims without a court ruling and final judgment proving a policy breach. Plaintiffs must cite specific violated laws, detail damages tied to the policy, and skip attorney fees in awards. It also bans public adjuster hostility, tweaks cancellation rules, clarifies flood exclusion disclaimers, and cuts general lines agent coursework from 200 to 60 hours.
HB 1047: A Broad Brush on Claims and Conduct
Rep. Kim Berfield (R-Clearwater) delivers HB 1047, echoing SB 230’s spirit with a wide lens on property claims and adjuster behavior. It bans adversarial public adjuster tactics (like secret recordings), tweaks estimate and payment language for clarity, and tightens flood exclusion notices. It also matches the 60-hour agent coursework cut and lets insurers cancel policies pre-repair with 45 days’ notice if insurable interest fades.
SB 1534: Litigation Financing in the Crosshairs
Senator Jay Collins (R-Tampa) revives the “Litigation Investment Safeguards and Transparency Act” with SB 1534. It targets third-party lawsuit funding against businesses, including insurers, with conflict checks, disclosure mandates (especially for foreign players), and financier liability for fees and sanctions.
SB 794: Humans Over AI in Claim Denials
Senator Jennifer Bradley (R-Fleming Island) and Rep. Cassel’s SB 794 and HB 1555 demand human review for claim denials—no AI or algorithms allowed. A “qualified human professional” must sign off, and denial notices must name them. This could slow denials but ease automation fears.
What’s Next?
This legislative whirlwind—SB 554, SB 1508, HB 451, and beyond—could swamp insurers with compliance headaches, cash flow risks, and litigation exposure. Sold as consumer wins, these bills might drive up costs and destabilize Florida’s insurance market instead. We’re on it—monitoring every twist and turn. Questions? Reach out to our team at Wood Smith Henning & Berman anytime.