Third-Party Financing for Property Insurance Lawsuits in Florida: Myth or Reality?

In the modern era, lawmakers and insiders are constantly arguing that the insurance industry is under threat. These arguments almost always oppose measures to make the insurance industry more amenable to average homeowners who are just trying to pay the bills. One of the latest “threats” to the insurance industry voiced by lawmakers and insiders is third-party financing for lawsuits. Is this really a threat? Or is this simply an attempt to diminish the valuable role played by property insurance lawyers in Fort Lauderdale?

What Is Third-Party Litigation Funding?

Third-party litigation funding (TPLF) has become a major buzz phrase in the insurance industry. Many observers see this as a direct threat to the integrity and sustainability of the industry. In October of 2025, Insurance Business Magazine reported that, according to a panel at a recent American Property Casualty Insurance (APCIA) meeting, TPLF could add $50 billion to industry costs. The panel claimed that at the end of the day, policyholders would be forced to pay these costs through their insurance premiums.

But what exactly is third-party litigation funding? Essentially, TPLF is like betting on the outcome of a trial. However, there is a big difference between TPLF and betting on the result of a sports game. What makes TPLF distinct is the fact that the people betting on the outcome also fund one side of the trial. It’s like betting on the outcome of a football game while also providing one team with more money to train, buy players, and hire coaches.

At first, this might seem like a risky move. Although TPLF might increase the chance of a positive outcome, there’s always a chance that the plaintiff may lose during the trial. In the eyes of investors, however, this is a risk worth taking. This risk becomes especially attractive when one considers the recent trend of “nuclear verdicts” and highly sympathetic jurors. It is possible to enjoy an enormous return on investment (ROI) with TPLF in the modern era.

TPLF Benefits the Injured Party

While TPLF is a controversial practice, there is no doubt that it can benefit the homeowner. These people are often left homeless by destructive events. Some are forced to wait years because they face highly combative, stubborn insurance companies that refuse to cooperate in a civil manner. While these individuals might not “deserve” tens or even hundreds of millions of dollars, they also deserve to be treated like human beings.

If the insurance industry is concerned about the rise of TPLF, perhaps it should begin treating homeowners with more respect. These are the same companies that are adopting widespread use of AI, allegedly to facilitate the automatic denial of claims and applications without any human input.

Contact Our Fort Lauderdale Property Insurance Lawyers Today

At Geyer Fuxa Tyler, our legal team is made up of a diverse combination of attorneys who are well-positioned to protect the legal rights and financial interests of policyholders. If your property insurance claim was denied, we can help. For a free consultation, please call us today at (954) 990-5251. With an office in Sunrise, we represent policyholders in Broward County and throughout the state of Florida.

Sources:

 insurancebusinessmag.com/us/news/breaking-news/insurers-warned-tplf-could-add-50b-to-industry-costs-552353.aspx

riskandinsurance.com/third-party-litigation-funding-is-forcing-commercial-insureds-to-proactively-manage-their-legal-risk/