This morning, CNBC exclusively reported that USAA will return nearly $1 billion to approximately 830,000 Florida insurance members — a landmark moment that the company’s CEO directly and unambiguously attributed to Florida’s tort reform. The announcement includes a new $500 million dividend on top of $160 million announced in December and lowered premiums, and it is the clearest proof yet that commonsense legal reform works and that consumers are the ones who win when lawmakers have the courage to act.
USAA CEO Juan Andrade joined CNBC exclusively this morning to explain the driving forces behind the rebate, and he did not mince words. “This is really all about tort reform in the state of Florida,” Andrade told CNBC anchor Contessa Brewer.
“When you think about the drivers of cost in our industry, it’s really three things. It’s natural catastrophes. It’s inflation, but it’s also legal system abuse. And when you have a governor, an insurance commissioner, a legislature that have the courage and the conviction to pass tort reform, they stabilized the insurance market. And Florida is a case study of that.”
Andrade tied the savings directly to Governor DeSantis’s 2023 reforms without hesitation:
“The reason we’re able to return close to a billion dollars to all of those members in the state of Florida is because Governor DeSantis passed tort reform back in 2023. And now as we price our products, we’re able to see that come through, and so we’re able to return this to our members.”
The numbers behind Florida’s turnaround are staggering, and Andrade walked through them on air. Before reform, Florida represented just nine percent of homeowners nationwide but generated roughly eighty percent of the country’s property insurance litigation, a disparity that CNBC’s Contessa Brewer highlighted directly during the interview. Andrade offered a before-and-after statistic that captures the full scale of what legal reform has achieved:
“In 2023, the insurance industry spent $3.5 billion in legal defense costs. It’s now down to $100 million. That’s the difference in what they were able to achieve.”
Auto glass litigation plummeted from over 24,000 lawsuits in the second quarter of 2023 to just 2,600 in the same period of 2024, according to Milliman data. Florida, which once ranked among the nation’s worst states for nuclear verdict payouts, had dropped to tenth in the nation by 2024. As the Wall Street Journal editorial board wrote, “Florida is showing that political leaders can head off a market disaster and lower costs if they have the courage to reform.”The savings are already being felt at the individual member level. Earlier this year, USAA filed for a 7% average auto insurance rate decrease in Florida, set to take effect by May 2026 and expected to generate more than $125 million in estimated annual savings for Florida members. Randy Termeer, USAA P&C President, framed the significance plainly:
“Every dollar counts for our active-duty service members, veterans and their families, now more than ever. This rate decrease reflects improving conditions in Florida’s insurance market, as well as our ability to price competitively while maintaining the financial strength to take care of our members when they need us. Florida leaders have done great work to strengthen the insurance system and support a more stable, competitive market for Floridians.”
USAA is far from alone. As PACT reported earlier this year, 42 Florida auto insurers have now filed rate decrease requests, with State Farm filing for a 10% average decrease representing its third cut since 2024 and totaling more than $1 billion in statewide savings. Florida Insurance Commissioner Mike Yaworsky has been unequivocal:
“It is very clear that tort reform was the right thing to do, and we will continue to build on this success.”
Andrade also made clear that the cost of legal system abuse is not a Florida problem. It is a national one. “If you think about the cost of legal system abuse for the average American family, it’s about $5,500 a year,” he told CNBC. “That is a significant amount.” He identified California, Texas, specifically Harris County, and New York as states where legal system abuse continues to drive costs higher for consumers. In Los Angeles, lawsuit abuse payouts totaled $240 million in one fiscal year alone, with city administrative officer Matthew Szabo telling the City Council directly:
“Plaintiff attorneys are getting rich at the expense of taxpayers and city services. Every dollar that goes towards a liability payout due to a lawsuit is reducing a city service.”
Andrade noted that New York has recently taken steps toward reform following Florida’s example, and that this remains what he called “a fifty-state battle.” He also shared that approximately fifty percent or more of USAA members nationwide are expected to receive a rate decrease this year as the company takes targeted rate actions across the country.
Florida’s results did not happen by accident. They are the direct consequence of a sustained, multi-year legislative effort to rein in lawsuit abuse. Governor DeSantis connected the savings directly to his reform agenda, noting that prior to the reforms, Florida’s homeowner’s insurance market accounted for just 8% of claims nationwide but a massive 78% of litigation costs. Since the reforms passed, 17 new companies are now operating in Florida, bringing in more than $57.4 million in capital. Former Florida House Speaker and PACT Board Member Paul Renner, writing in the Wall Street Journal, put it simply:
“Make litigation and insurance rules fair, and watch as premiums come down.”
The message from this morning’s CNBC broadcast is one that lawmakers in every state should hear and act on immediately. As Andrade told CNBC, “When you basically have courageous legislators that are willing to take this on, that’s a clear sign of where savings can come from, and it goes back to the tax on American consumers that you’re getting from all these litigations and all these lawsuits.” Motor vehicle insurance continues to be one of the biggest drivers of inflation nationwide, rising 6.4% over the past year according to the Bureau of Labor Statistics. Florida has shown exactly what is possible when leaders choose consumers over the plaintiff’s bar. Nearly one million USAA members are about to receive that message directly in their bank accounts. It is time for the rest of the country to follow Florida’s lead.