Florida safety‑net ends 1% insurance surcharge early, pledges up to $650 million saving

The Florida Insurance Guaranty Association voted on Feb. 23, 2026 to end a 1% emergency assessment on homeowners and business property and casualty insurance policies two years ahead of schedule, a move FIGA said will save policyholders as much as $650 million.

FIGA imposed the surcharge after waves of insurer insolvencies that increased claim costs for the guaranty fund and triggered emergency assessments on active policyholders. The assessment had been scheduled to remain in force through 2028; the board’s unanimous decision cuts that timeline, removing a recurring policy-level levy that insurers had been collecting from customers to reimburse the fund for payouts on failed carriers.

FIGA is the industry-backed safety net that pays covered claims when a Florida insurer becomes insolvent, then recovers those payouts through assessments on other insurers and, ultimately, on policyholders. The 1% surcharge has been applied to premium bills for residential and commercial property and casualty coverage as a temporary mechanism to replenish FIGA’s capacity after a period of elevated insolvencies and higher catastrophe exposure.

FIGA’s estimate of up to $650 million in savings frames the decision as direct relief to policyholders who have seen premiums and out-of-pocket costs rise rapidly in recent years. For an individual homeowner with a $3,000 annual premium, the halted 1% assessment would reduce yearly charges by about $30, assuming insurers pass the full cut through to customers. Across Florida’s millions of property policies that pay into FIGA, the aggregate effect is what FIGA cited in announcing the board action.

Financial markets and insurers will read the move two ways. In the near term, eliminating the surcharge eases a visible drag on customer bills and could slightly reduce political pressure on lawmakers over insurance costs. It also removes a predictable funding stream that FIGA has relied on to stabilize its balance sheet after insolvencies. Over the medium term, FIGA and regulators will need to show that reserves and litigation risk have declined enough to justify the premature end of the levy, or that alternative recovery mechanisms are in place should another wave of failures occur after a major hurricane.

The decision matters for insurers’ earnings and pricing decisions because emergency assessments are typically priced by carriers into rates and used by underwriters to model tail risk. With the assessment gone, some insurers may modestly lower premium increases they otherwise would have sought, while others may leave rates unchanged if reinsurance or capital costs remain high. Rating agencies and reinsurers will monitor FIGA’s reserve trajectory and any changes in projected insolvency frequency to reassess Florida risk premiums.

For policyholders the immediate impact is clear: less on-bill surcharge and a headline saving that FIGA quantified at up to $650 million statewide. For state policymakers and regulators, the vote presents both an opportunity to claim progress in stabilizing the market and a responsibility to ensure the guaranty fund remains robust ahead of Florida’s hurricane season, when major losses could quickly reverse the improvement. The board did not attach new restrictions to the termination, leaving FIGA’s future funding options available if conditions change.