Florida lawmakers are set to begin a special legislative session Monday to address the state’s deepening property-insurance crisis, which is raising premiums for homeowners, driving some carriers to insolvency and threatening to stifle the housing market.

Among the issues the Republican-led legislature plans to address are a highly litigious environment in Florida, the availability of reinsurance—backup coverage insurers buy—and the ballooning size of the state’s insurer of last resort, according to a proposed bill released late Friday.

It is the second special session on the issue called this year by Republican Gov. Ron DeSantis, who is considered a potential 2024 presidential contender and could face blowback if the crisis doesn’t abate. A collapse of the home-insurance market could spill into the residential real-estate market, insurance executives and regulators say.

“If we don’t do this right, Floridians will leave the state,” said Republican state Rep. Bob Rommel, chairman of the House commerce committee and part of the team drafting legislation. “Our entire economy is riding on this.”

Many of the state’s smaller, private-sector insurers have been losing money for years, beset by rising reinsurance costs, litigation expenses and hurricanes including Ian, which struck Florida’s southwest coast in September. Risk modelers estimate Ian will cost insurers $40 billion to $70 billion.

The state is heavily dependent on relatively small, Florida-focused carriers, in the wake of retreats by national carriers many years ago. Six of these have been declared insolvent since February, as well as a Louisiana-based carrier that wrote policies in Florida, according to a Dec. 8 report by A.M. Best, which rates insurers.

Reinsurers say they have been increasing prices because of growing catastrophe losses worldwide and worries about more-intense natural disasters. In Florida, they say they also are concerned about litigation costs. Some have reduced their business in the state.

This past summer, Florida-focused home insurers went through their annual reinsurance renewals with prices going up 25% to 30% in many instances, according to ratings firm Demotech Inc. Some carriers were unable to get as much reinsurance as they wanted.

Barry Gilway, chief executive of Citizens Property Insurance Corp., the state-run insurer of last resort, said his team is hearing that reinsurance pricing will be up 30% to 70% for Florida insurers in 2023, with capacity scarcer.

“It could be astronomically expensive,” he said.

Florida’s average annual home-insurance premium of $4,231 is the highest in the nation, and nearly triple the nationwide average, according to projections by trade group Insurance Information Institute.

David Altmaier, Florida’s insurance commissioner, told a recent state Chamber of Commerce conference focused on insurance issues that his office continues to approve actuarially sound “30%-plus rate increases.” With insolvencies already occurring, “we cannot have an underpriced insurance market,” he said.

Lawmakers say a priority in the special session is to rein in litigation, which they say is driven by attorneys aggressively suing carriers, including over minor policy disputes. Florida has just under 10% of U.S. homeowners insurance claims, yet nearly 80% of the nation’s homeowners insurance lawsuits, according to the state’s Office of Insurance Regulation.

Amy Boggs, property-insurance section chair for the Florida Justice Association, which represents trial lawyers, criticized the call for more litigation reform. “Litigation isn’t the problem—it’s the scapegoat,” she said. “What we don’t need is more legislation that erodes the rights of policyholders in an attempt to bail out the industry on the backs of Florida consumers.”

Theodore Tate, a 42-year-old police officer who owns a 2,900-square-foot home in Palmetto Bay, south of Miami, said his insurer tried to drop him earlier this year, even though he had never filed a claim. After his broker intervened, the carrier said it would continue to insure the home with a premium of more than $11,000, up from about $4,500.