USAA to Return Nearly $1 Billion to Florida Members After Tort Reforms

CNBC reported Monday that USAA will deliver close to $1 billion in combined returns and savings to eligible Florida policyholders. The package includes a $500 million dividend. The insurer points directly to the state’s civil litigation reforms as the reason capital can now flow back to members.

Tort Reforms Drive Down USAA Florida Dividend Costs

Florida passed sweeping tort legislation in 2023. The law cut the statute of limitations on claims to two years, eliminated so-called phantom damages, and removed one-way attorney fee awards. Insurers had long argued those arrangements fuelled excessive litigation at their expense.

The data since then is striking. Auto glass lawsuits dropped from roughly 24,000 in Q2 2023 to about 2,600 in Q2 2024, according to figures cited by USAA from a Milliman white paper. Legal defense costs paid by Florida insurers collapsed from $3.46 billion in 2023 to $107 million in 2024, according to the state’s Office of Insurance Regulation.

USAA President and CEO Juan C. Andrade told CNBC the goal is to deliver “meaningful, immediate relief” while protecting the financial strength members depend on.

Background: Florida’s Outsized Litigation Problem

Before the reforms, Florida’s insurance litigation landscape was an extreme outlier. The R Street Institute found that roughly 76% of all U.S. homeowners insurance lawsuits originated in Florida despite the state representing just 9% of American homeowners.

Florida ranked second nationally for so-called nuclear verdict payouts between 2009 and 2022. By 2024 it had fallen to tenth place. Insurance litigation filings fell 23% year over year from 2023 to 2024, according to Florida Governor Ron DeSantis’s office.

When litigation costs rise, insurers typically pass them through as higher premiums. When they fall, carriers gain room to cut rates or return capital. USAA says Florida now illustrates that dynamic clearly.

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Other States Watch Florida Closely

A February study cited by USAA estimated the tort reforms produced an average 14.5% reduction in property and casualty insurance costs compared with a no-reform scenario. The same research credited the changes with generating more than $4.2 billion in annual economic output and supporting nearly 30,000 jobs statewide.

Georgia and Louisiana both enacted comparable tort legislation in 2025. New York is reportedly weighing similar changes. USAA said roughly half of its national policyholders should see lower six-month auto premiums this year.

Critics caution that tighter legal frameworks can make it harder for consumers to dispute wrongly denied claims. Supporters argue Florida now provides a concrete consumer-facing proof point that litigation reform lowers insurance costs.

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