Clyde & Co predicts renewed push for property insurance reform in 2025

2025 is expected to see a renewed push for statutory reforms in states heavily impacted by hurricanes in the commercial property insurance space in hurricane-prone states, which were severely impacted by the 2024 Atlantic Hurricane season, according to Eric Benedict, Senior Associate at Clyde & Co.

Florida and Louisiana have recently enacted laws making it harder for policyholders to recover attorneys’ fees in lawsuits against insurers.

This move, intended to create a more insurer-friendly environment, has drawn criticism from policyholders and their legal representatives.

Specifically, the reforms make recovery of attorneys’ fees more difficult for policyholders who file suit against their insurers for first-party losses.

“These changes may decrease a policyholder’s incentive to bring suit and lead to a decrease in the number of suits brought against insurers,” says Benedict. “Policyholder firms may focus their efforts on larger cases and those with a higher likelihood of recovery.”

Benedict predicts that 2025 will see renewed efforts to either reverse these reforms or prevent their enactment in other states.

In states where similar statutory reforms have not been enacted, a surge in property-related lawsuits is expected in an effort to avoid application of such reforms, Benedict noted.

Beyond legislative changes, the Senior Associate highlights the potential impact of tariffs on construction materials, something that should be monitored.

Increased tariffs could drive up repair and reconstruction costs for insurers, ultimately leading to higher premiums for policyholders.

“Tariffs would likely drive up the cost of building materials, which could, at least temporarily, increase the costs borne by insurers for covered replacement value claims,” Benedict explains.

“In addition, reduction in the available construction labor supply may drive up labor costs for repairs and reconstruction. These higher costs, in turn, could lead to increased insurance premiums as insurers adjust their underwriting to reflect higher costs,” he concluded.