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Commercial auto insurance in Florida: what pricing teams need to know
Florida's commercial auto market is being rebuilt around the 2023 tort reform package. HB 837 has pulled the state from 2nd to 10th in the national nuclear verdict rankings, and personal auto rates are rolling back.
Commercial auto severity, though, is a national problem the loss data hasn't caught up with, so Florida's improving litigation backdrop is only part of the pricing picture.
Market overview
HB 837, signed March 24, 2023, replaced Florida's pure comparative negligence regime with a modified standard barring recovery for plaintiffs more than 50% at fault, cut the statute of limitations for general negligence from four years to two, repealed one-way attorney fees in insurance litigation, and rewrote bad-faith standards under §624.155 with a 90-day safe harbor for insurers. Companion legislation SB 1002 banned assignment of benefits in auto glass claims.
The litigation environment has measurably reset. Marathon Strategies reports Florida fell from its historical position as the second-ranked venue for nuclear verdicts (2009-2022) to seventh in 2023 and tenth in 2024, against a national backdrop where total nuclear verdict awards rose 116% year over year. Florida OIR reports insurance litigation filings fell 23% year over year from 2023 to 2024 and remain below pre-2018 levels.
Catastrophe exposure remains structural to any Florida book. Hurricane Ian's reported insured losses reached $21.4 billion across 776,941 claims per OIR's tracking data, with auto damage among the reported lines.
The competitive structure is concentrated in commercial auto. Per S&P Global Market Intelligence, Progressive led the national commercial auto market in 2024 with $10.79 billion in direct premiums written, a 14.9% market share, and an 88.2% net combined ratio, the strongest underwriting result among large carriers, against an industry segment that posted combined ratios above 100% for the thirteenth time in fourteen years.
Key pricing factors
The headline tension for 2025 Florida pricing is between a softening litigation backdrop and a national severity trend that hasn't stabilized. Milliman's 2024 commercial auto liability report describes actuaries facing the difficult task of calibrating a commercial auto severity trend that is not represented in historical data, with countrywide indicated rate need running above 10% annually since 2017 and the 2024 countrywide weighted calendar year loss and DCCE ratio reaching 86%, the highest in five years.
Severity is doing most of the work. The 90th percentile of loss ratios in Milliman's top-40 commercial auto liability composite has climbed from 105% to 120% across the last five years, with rising severities and continued adverse reserve development as the largest contributors.
Florida's specific position is worth pricing teams' attention. Milliman's same report identifies Florida as one of the few large states where commercial auto CYLR substantially improved in 2024 (the first improvement since 2021), while New York and Pennsylvania deteriorated. The reform tailwind is visible in carrier data, but the open question for actuaries is how much of the 2024 reading is structural versus cyclical, given that reform-era loss data is still thin.
Regulatory snapshot
Florida regulates commercial auto through the Florida Office of Insurance Regulation (OIR); there is no separately constituted department of insurance. Commercial auto rates fall under F.S. 627.062, with two filing pathways: file-and-use (90 days before the effective date) and use-and-file (within 30 days after, carrying the risk of OIR-ordered premium return if the rate is later found excessive). Annual base rate filings are required.
HB 837 is the dominant regulatory development for any Florida pricing model. The package established modified comparative negligence at the 50% threshold, halved the statute of limitations on general negligence, codified that mere negligence is insufficient to constitute bad faith, and eliminated one-way attorney fees in insurance litigation. Most provisions apply to causes of action filed or accruing after March 24, 2023. The auto glass AOB ban under SB 1002 took effect July 1, 2023.
Separately, providers have been transitioning ISO commercial auto loss-cost support away from the Legacy Class Plan to the new Commercial Auto Class Plan, with Legacy support targeted to sunset by 2026. Carriers still rating off the Legacy plan need to plan for the migration.
