Understanding the FIGA Assessment

To understand why this change matters, it helps to know how the assessment originated.

The Florida Insurance Guaranty Association exists as a financial safety net for policyholders when insurance companies become insolvent. If an insurer fails and cannot pay outstanding claims, FIGA steps in to ensure policyholders still receive compensation for covered losses.

When multiple insurance companies collapse within a short period of time, the system must raise funds to pay those claims and refund unearned premiums to policyholders.

That is exactly what happened in recent years.

A series of insurer insolvencies placed significant pressure on Florida’s property insurance market. As those companies failed, FIGA issued bonds to cover unpaid claims and maintain financial stability in the system.

To repay those bonds, the state introduced a temporary emergency assessment equal to 1% of property insurance premiums.

This fee began appearing on policies starting October 1, 2023.

For homeowners reviewing their insurance statements, it appeared as an additional line item tied to FIGA funding.

---

Why the Fee Is Ending Early

Originally, the emergency assessment was expected to remain in place for several years while FIGA repaid its outstanding obligations.

However, recent financial improvements within the insurance system have allowed the association to accelerate repayment timelines.

Because of this progress, FIGA voted to end the assessment two years earlier than planned.

Under the new timeline:

• The assessment will continue appearing on insurance policies renewing through September 30, 2026.

• Beginning October 1, 2026, the 1% charge will be removed from property insurance policies statewide.

State officials estimate the change will save Florida policyholders approximately $650 million between 2026 and 2028.

While individual savings will vary based on policy cost, the reduction provides measurable relief for homeowners.

---

What the Savings Look Like for Homeowners

The exact savings depend on the cost of each insurance policy.

Because the assessment is calculated as 1% of the annual premium, the amount varies from household to household.

Here are some typical examples:

• A homeowner paying $2,000 annually for insurance saves roughly $20 per year once the fee ends.

• A policy with a $3,500 premium saves about $35 annually.

• A homeowner paying $5,000 annually saves approximately $50 per year.

While these numbers may appear modest on their own, collectively they represent a substantial reduction across millions of policies statewide.

More importantly, the early removal of the assessment indicates that financial pressures within the insurance system are easing.

---

Signs the Insurance Market May Be Stabilizing

The early end of the FIGA assessment reflects broader changes within Florida’s property insurance market.

Over the past several years, lawmakers implemented major reforms aimed at stabilizing the industry.

These reforms addressed several long-standing issues that had contributed to insurer insolvencies and rising premiums.

Key changes included:

• Reducing litigation costs associated with property insurance claims

• Adjusting legal fee structures in insurance disputes

• Encouraging insurers to return to the Florida market

• Improving underwriting stability

These measures were designed to make the Florida insurance market more sustainable for insurers and policyholders alike.

According to state officials, the early termination of the FIGA assessment suggests those reforms are beginning to produce measurable results.

---

Why Insurance Costs Matter in Real Estate

For buyers and sellers alike, property insurance has become one of the most important factors in housing affordability.

Over the past few years, rising insurance premiums have influenced real estate decisions across Florida.

Buyers evaluating a home purchase now consider insurance costs alongside mortgage payments, property taxes, and maintenance expenses.

Higher insurance costs can affect monthly housing budgets and influence whether certain homes remain affordable.

For sellers, insurance costs may also shape buyer demand. Homes located in areas with high insurance premiums may face additional scrutiny from prospective buyers.

Because of this, improvements in the insurance market can have ripple effects across the broader real estate landscape.

Even small reductions in insurance costs can help improve overall affordability and buyer confidence.

---

What This Means for Florida Homebuyers

For people considering purchasing property in Florida, the early end of the FIGA assessment is one piece of encouraging news in an otherwise complex insurance environment.

While the assessment itself represents only a small percentage of insurance costs, its removal signals progress toward a more stable insurance market.

Stability is important for buyers planning long-term homeownership.

When insurance markets experience volatility, homeowners face unpredictable premium increases and coverage challenges.

A more stable market allows buyers to make housing decisions with greater confidence about future expenses.

For prospective homeowners, understanding insurance costs remains a crucial part of the homebuying process.

Working with knowledgeable professionals—including real estate agents and insurance advisors—can help buyers evaluate the full financial picture of a property purchase.

---

What This Means for Current Homeowners

For existing homeowners, the removal of the FIGA assessment represents a modest but welcome reduction in annual insurance costs.

More importantly, it reflects progress in the broader effort to stabilize Florida’s property insurance system.

Insurance remains one of the most significant operating expenses associated with homeownership in Florida. Any improvement in cost stability can help homeowners manage long-term housing budgets more effectively.

Homeowners should still review their policies regularly and explore available coverage options. Insurance markets continue evolving, and policy adjustments may provide opportunities to optimize coverage and cost.

However, the early termination of this assessment suggests that some of the most severe pressures on the system may be easing.

---

The Bigger Picture for Florida’s Housing Market

Florida’s real estate market has long been shaped by unique factors, including weather exposure, population growth, and strong migration from other states.

Insurance costs have become one of the most visible challenges facing the market in recent years.

While no single policy change can solve all insurance-related concerns, the early end of the FIGA assessment represents a step in the right direction.

Combined with ongoing legislative reforms and improving market conditions, it may signal a gradual shift toward greater stability.

For homeowners, buyers, and investors, insurance costs will likely remain an important topic for years to come.

However, developments like this suggest that progress is being made toward a more sustainable system.

---

Final Thoughts

Florida’s property insurance market has experienced significant turbulence in recent years, affecting homeowners across the state.

The early termination of the FIGA emergency assessment offers a small but meaningful sign of improvement.

Beginning in October 2026, policyholders will no longer pay the 1% fee that helped stabilize the system after insurer failures. While individual savings may be modest, the broader implications are encouraging.

The decision reflects growing financial stability within the insurance system and suggests that recent legislative reforms may be helping restore balance to the market.

For homeowners and prospective buyers alike, this development serves as a reminder that housing markets are influenced by more than just home prices and mortgage rates.

Insurance costs, regulatory changes, and economic trends all play a role in shaping the real estate landscape.

As Florida continues working to strengthen its insurance system, homeowners may gradually see additional signs of improvement in the years ahead.

 

Ready to buy a home? we are here to help! www.TheKullGroup.com

Want to know what your home is worth? Go to our free home valuation tool

 

About the Authors

We’re Chris and Sue Kull, passionate real estate agents dedicated to helping clients buy, sell, or invest in South Florida. With over 31 years of experience, our team of specialists—from lenders to inspectors—delivers more benefits, better guidance, and superior service than any other realtors in the area. We’re honored to be part of your real estate journey and look forward to helping you achieve your goals!

 

If you would like to chat with someone about how to achieve your goals, we are always here to help! Give us a call anytime 561-440-0777