USAA is returning nearly $1 billion to eligible Florida members as the insurance industry shows signs of moderation following state legal reforms that have sharply reduced litigation costs. The San Antonio-based insurer will distribute the funds between December 2025 and July 2026 through rate cuts and direct member payments, with a $500 million dividend beginning June 15 to roughly 830,000 members who held auto policies between 2023 and 2025.
The average dividend payment will be about $760, with more than a quarter of eligible members receiving over $1,000, according to USAA. The broader $1 billion commitment also includes $160 million in insurance dividends paid in December 2025 and $250 million in savings from two auto rate filings that reduced Florida auto rates by an average 14%.
Florida passed comprehensive tort reforms in 2023 that shortened the statute of limitations for negligence claims from four years to two years, eliminated so-called phantom damages, and ended one-way attorney fee awards that had favored plaintiffs. USAA President and CEO Juan C. Andrade credited these legal changes as enabling the company to return capital to policyholders. “From rate reductions to rewards programs and direct returns, our goal is to deliver meaningful, immediate relief while preserving the financial strength our members depend on,” Andrade said in a statement to CNBC.
The impact of Florida’s reforms on litigation has been dramatic. Auto glass lawsuits fell from about 24,000 in the second quarter of 2023 to roughly 2,600 in the same period of 2024, according to a Milliman white paper cited by USAA. Florida had ranked second nationally for “nuclear verdict” payouts from 2009 to 2022 but dropped to 10th by 2024. Legal defense costs paid by insurers also fell sharply, dropping to $107 million in 2024 from an all-time high of $3.46 billion in 2023, according to Florida’s Office of Insurance Regulation.
Broader Industry Moderation
USAA’s Florida action reflects a wider trend of moderation in the insurance industry. Global insurance rates declined 5% in the first quarter of 2026, marking the seventh consecutive quarter of rate decreases, according to Marsh’s Global Insurance Market Index. The U.S. property and casualty industry is expected to see underlying growth decrease 3.7% for the first half of 2026 as it adjusts to softer market conditions, according to Insurance Journal reporting on industry data.
The Florida 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 alleged legal system abuse and improving market stability. New York is also considering similar changes, according to USAA. A February study cited by the company found that Florida’s tort reforms have driven an average 14.5% reduction in property and casualty insurance costs compared with what would have occurred without the reforms.
For consumers, the mechanics are straightforward: when litigation costs rise, insurers often pass those costs through in higher premiums. When those costs fall, companies may have more room to cut rates, issue dividends or return capital to policyholders. USAA says legal costs had been a significant driver of premium increases, but those costs are easing and market conditions are stabilizing, paving the way for lower rates and rebates.
Sources
- CNBC — USAA’s $1 billion return to Florida members, tort reform impact, dividend details, CEO statement, and litigation cost data
- Marsh — Global insurance rate declines in Q1 2026 and consecutive quarters of moderation
- Insurance Journal — U.S. property and casualty industry growth projections for 2026
- Florida’s Office of Insurance Regulation — Legal defense cost data for 2023 and 2024
