USAA said it will provide eligible Florida members with savings and benefits totaling nearly $1 billion, including a $500 million dividend that CNBC exclusively reported.
Insurers say Florida’s civil litigation and tort reforms are the main reasons they can send money to policyholders. USAA said litigation costs have declined as Florida has moved to rein in what insurers have long called an abuse of the legal system.
In 2023, Florida passed tort reform that shortened the statute of limitations to two years, eliminated so-called phantom damages, and eliminated unilateral attorney fee awards. These changes are intended to reduce incentives for excessive litigation, particularly in insurance claims.
Since then, the number of cases has changed rapidly. Auto glass lawsuits fell from about 24,000 in the second quarter of 2023 to about 2,600 in the same period in 2024, according to a Milliman white paper cited by USAA. Florida ranked second in the nation in “nuclear judgment” payments from 2009 to 2022, but fell to 10th in 2024, Milliman said.
This trend is also seen in homeowners insurance. According to the R Street Institute, 76% of homeowners insurance lawsuits nationwide were initiated in Florida, even though the state accounted for just 9% of U.S. homeowners just before the reform was passed. According to R Street data, new homeowners insurance lawsuits filed in Florida decreased from 79.9% of the nation’s total in 2018 to 71.5% in 2023, and the number of lawsuits continues to decline by double digits in 2024.
According to a 2025 statement from Florida Governor Ron DeSantis’ office, insurance lawsuit filings in Florida decreased 23% year over year from 2023 to 2024 and remained below pre-2018 levels. Legal defense costs paid by insurance companies also fell significantly, falling from a record high of $3.46 billion in 2023 to $107 million in 2024, according to the Florida Department of Insurance Regulation.
For consumers, the mechanism is simple. When litigation costs rise, insurance companies often pass those costs on in the form of higher premiums. Lowering these costs could give companies more leeway to cut interest rates, issue dividends and return capital to policyholders.
USAA said litigation costs were a major factor in the premium increase. However, these costs are easing and market conditions are stabilizing.
Insurers say this paves the way for lower interest rates and rebates.
“From rate reductions to rewards programs to direct refunds, our goal is to provide meaningful and immediate relief while preserving the financial strength our members rely on,” USAA President and CEO Juan C. Andrade said in a statement to CNBC.
Florida’s example is likely to be closely watched by insurers, regulators and lawmakers in other states. Georgia and Louisiana enacted tort reforms in 2025 aimed at curbing allegations of legal system abuse, increasing transparency, and better aligning damages with actual costs. New York state is considering similar changes, according to USAA.
A February study cited by the company found that Florida’s tort reforms reduced property and casualty insurance costs by an average of 14.5% compared to without the reforms. The study also found that lower insurance costs and increased market stability are leading to more companies entering or returning to the Florida market, increasing consumer choice and competition.
The broader economic impact extends beyond insurance premiums. The study estimates that the reforms would generate more than $4.2 billion in annual gross product and support approximately 29,370 jobs across the state, including multiplier effects. The agency also estimated that it would generate $206.6 million a year in new state tax revenue and $155.3 million in fiscal benefits for local governments across Florida.
Tort reform advocates say Florida has provided evidence for consumers that cutting excessive litigation can lower insurance premiums. Critics warn that the legal restrictions could make it harder for policyholders to challenge their insurers if they dispute a claim.
For now, USAA is framing its actions in Florida as part of a broader national effort to help military families manage rising costs. The company said about half of its policyholders are expected to see a six-month reduction in their auto insurance premiums in 2026.
The San Antonio-based financial services company, which serves military members, veterans and their families, said eligible current Florida auto policyholders will begin receiving dividends on June 15. The company said the average payment was about $760, with more than a quarter of eligible members receiving more than $1,000.
The $500 million dividend will go to approximately 830,000 members who had USAA auto insurance between 2023 and 2025.
The payments are part of a broader series of actions that USAA says will deliver nearly $1 billion in value to eligible Florida members between December 2025 and July 2026. This includes $160 million in insurance dividends paid in December 2025, $250 million in savings from two motor vehicle rate filings that lowered Florida motor vehicle rates by an average of 14%, and a newly announced $500 million dividend.
Vehicle repair costs, weather losses, and inflation continue to put significant pressure on the insurance industry as a whole. But USAA’s payments to Florida provide insurers and reform advocates with a concrete case study that shows policyholders could save money if litigation costs go down.
