Q&A – Property Taxes vs. Property Insurance
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Today’s entry: @brianmuddradio I am concerned about the focus on ending property taxes which would, in turn, end the homestead exemption and portability for primary residences. Homeowners insurance in has escalated at a higher rate (~40%) than property taxes (~30%) in Florida. Florida’s insurers do not offer any type of hedge or protection like the homestead exemption or portability. Furthermore, property values in Florida are on the decline, and property taxes will follow when a property is reassessed. Property taxes are calculated based on millage rate. On the other hand, Florida’s insurers have a history of having a free for all in Florida, and passing very minimal savings to Floridans. The narrative being shared about auto insurance rates decreasing ~8% recently is a case in point. They’ve increased ~25%+ since 2019, or $2,150 → ~$2,694 average annual premium increase over that period. The claim is that the tort reform, or strategically making it very difficult for consumers to seek legal recourse when their insurance company is in the wrong, worked. Many homeowners are going to get a rude awakening about this after the next big hurricane. Rude awakening.
Bottom Line: Today’s note was sent to me by a South Florida real-estate agent (not the Treu Group which I endorse). There’s no doubt that property and auto insurance premiums have been, and remain, significant concerns throughout the state. With that said, as always there are two sides to stories and one side to facts. Let’s apply them to the dynamics in play with today’s Q&A.
I get the concern, Florida homeowners are getting squeezed from every direction. The homestead exemption and portability (Save Our Homes) have been lifelines, capping assessment increases at 3% annually and letting Floridians transfer those savings when they move. Losing them sounds scary on the surface. But let's cut through the noise and look at the bigger picture.
First off, the push to end or dramatically reduce property taxes on primary residences isn't about stripping away your protections—it's about fundamentally changing how we fund local government, so those benefits aren't even necessary in the same way. Proposals floating around (and Governor DeSantis has weighed in on making homesteaded property taxes effectively zero) focus on shifting the burden away from homeowners while preserving or replacing the core relief.
You're right that homeowner's insurance has been a nightmare as premiums skyrocketed way faster than taxes in recent years due to litigation abuse, fraudulent claims, and hurricane risks. There’s not a cap on increases like the SOH cap. Insurers have a checkered history in Florida, and passing along minimal savings while jacking up rates feels like a bad deal. But here's where the comparison in today’s Q&A needs correcting: the tort reforms pushed under DeSantis aren't failing—they're starting to deliver. Auto insurance rates are dropping (major carriers down 8%+ averages for 2026, with some seeing cumulative 15-20% relief), thanks to curbing lawsuit mills and fraud. Homeowners insurance is stabilizing too—Citizens seeing 8.7% average cuts, private carriers filing decreases or freezes, and overall costs 14.5% lower than they would've been without reforms. It's not instant magic after years of abuse, but the trend is turning. A big hurricane will test it, sure, but fewer frivolous claims mean the system holds up better for legitimate ones.
Less than 30% of property tax revenue in Florida comes from homesteaded properties anyway (in Palm Beach County specifically it’s only about 15%). As I’ve illustrated the math works if local governments trim waste, prioritize, and look to other revenue sources like tourism, economic growth, or sales taxes that hit visitors and broader activity harder than fixed residents. Or...better still. Simply operate local governments the way we did in 2019.
In my analysis at the time of the Palm Beach County DOGE audit, I found that adjusted for inflation and population changes, PBC government spending had risen by greater than 15% over the prior five years. A figure that’s higher than the homesteaded property tax revenue. In other words, to the question of how could they run the government without the homesteaded property taxes? The answer would be the way they did in 2019. DeSantis has also stated that the state could pick up any shortfalls annually for rural counties with “budget dust”, meaning the price is so low it wouldn’t be significant.
On property values declining: Yes, some softening in parts of Florida is happening. That can eventually flow through to reassessments and lower taxes over time under the current system. But property taxes are tied to millage rates on assessed value. Insurance, meanwhile, doesn't auto-adjust downward with values; it's driven by risk models, reinsurance costs, and claims history. The "free-for-all" in insurance predates recent reforms and was fueled by exactly the kind of legal gaming that tort changes are fixing.
The core issue isn't pitting taxes against insurance—it's overall housing affordability. Both have risen, but government can't control weather or global reinsurance markets the way it can control its own spending and tax policy. Eliminating or slashing homesteaded property taxes would deliver direct, predictable relief every year, without depending on insurer goodwill. Portability and the exemption are bandaids on a system where government takes a cut of your home's value annually. It’s demonstrably better to reduce the take at the source.
Real relief comes from reforming government bloat, so we don't need as many exemptions in the first place, while keeping insurance reforms rolling to actually lower premiums long-term. Floridians deserve lower overall costs of owning a home, not just trading one burden for another.
As I’ve outlined previously, property taxation is fundamentally wrong. If you must pay taxes annually to avoid have your property reposed, do you actually own your property? The fact of the matter is that there’s no other form of property that one must pay taxes for annually to avoid its repossession. It’s an issue I’ve spoken of throughout the course of my career – not just since Governor DeSantis brought this to the forefront.