With more homeownership insurers re-entering the market, insurance rates are now more stabilized, according to local real estate experts.

Due to the tort reform, the amount of claims in South Florida has declined significantly, said Ryan Papy, president of Keyes Insurance at The Keyes Company.

The carriers have come back into the market, so they’re no longer canceling policies, and they may be offering coverages they weren’t issuing for a two- or three-year period, Mr. Papy said. “This shows that that market will stabilize, and that will have an influence on the options.”

The tort reform essentially created a more predictable and competitive insurance environment by limiting frivolous claims and making South Florida a more attractive market for insurers, he added. This has directly contributed to rate stabilization and increased consumer choices in residential insurance.

“If we look back maybe over the last five years, every year the residents have been receiving not only large rate increases, but they’re also getting cancellations, or there was lack of options in the private market, which for a lot of homeowners made it very difficult to find eligible coverage,” Mr. Papy explained.

“Now, I want to be clear,” he said, “it’s not new carriers, it’s just carriers that weren’t here for a long time that went dormant and weren’t running any new business, and now they’re coming back, and they are writing business, which leads to a more competitive market, and a more competitive market leads to more reasonable rates.”

There is the second part of the premium, which is just reinsurance, he said, which is an arrangement whereby an insurer transfers all or part of a risk to another insurance carrier to provide protection against the risk of the first insurance.

“Those rates have been going up, on average, somewhere around 10% to 15% outside of the year of covid, when it was at a peak,” Mr. Papy said. “I think we may see some relief on reinsurance rates, and that could be due to a lot of things, like liquidity in the market. All that extra money coming into the market could reduce insurance reinsurance rates, which is based upon supply and demand.

“So overall,” he continued, “rates are going to stabilize. I think homeowners will have more options. If the first option doesn’t work, there will be a second option, where before there was no second option other than an extremely hefty price that people didn’t want to pay.”

On the condominium side, owners are experiencing two things. One is building inspections and having enough reserves available, he said.

“But overall, when it comes to the master plan rates, I have seen those going down now, but for a certain segment of the population, maybe 15% to 20% of the population is probably going up significantly,” he added. “These may be condos that aren’t as updated, they don’t have the new windows, they don’t have a new roof or things of that nature.

“But overall, I think that the commercial market should see some signs of relief, at least for a subset of the market. I do believe that the worst of the days like that are a little bit behind us, and there’s like brighter pastures ahead in terms of options, better pricing.”