Jim Boyd bill discouraging lawsuits against insurance providers argued in Rules Committee

Debate of an overhaul of Florida’s property insurance laws went into overtime in the Senate Rules Committee, prompting a vote to be delayed until later in Session.

The legislation (SB 76) aims to get rid of incentives for attorneys to force insurance companies into court. But consumer advocates worry homeowners whose properties were damaged or destroyed will be the ones left in the cold.

Sen. Jim Boyd, a Bradenton Republican, said rising costs for policies create the need for reform. Just two weeks ago, Boyd, an insurance agent by trade, came home to news his own homeowners insurance costs will increase 40% this year.

The spiking costs, he said, are the result of an increasing number of claims that end up in court. He said lawsuits over such claim disputes in Florida grew from more than 27,000 in 2013 to more than 85,000 in 2020.

His legislation reduces the period of time a policy-holder has to file a claim from three years to two, reduces multiplier fees for attorneys that discourage settlements, allows insurance companies to offer policies that insure the depreciated cost of a roof instead of full replacement costs, and other reforms.

The Office of Insurance Regulation said insurance companies in the state will likely double losses from 2019 to 2020, threatening the entire industry.

But critics say the legislation could reduce the ability for individuals to make legitimate claims, and that the bill was made worse by changes made in its third and final committee stop.

Amy Boggs, an attorney representing policyholders, spoke on behalf of the Florida Justice Association. She said the bill undermines a legal process that has helped consumers for the last 128 years. “It’s giving Goliath an even bigger club to pound David into the sand,” she said.

Boyd said the legislation won’t prevent consumers with legitimate claims against insurance companies from seeking justice. “We are not eliminating the ability for constituents to take this to court,” he said.

Rather, he said his legislation gives discretion to judges to award significant fees, both for policyholders and attorneys.

Sen. Jeff Brandes, a St. Petersburg Republican, said Florida desperately needs reform, including some provisions of the legislation that already exist as law in 49 other states. He said Citizens Property Insurance, the state-managed insurer of last resort, sees 800 to 1,000 lawsuits filed against it each month.

“Why? Because of the incentive to go to the litigation slot machine and pull that handle and maybe get one-way attorneys fees,” he said. He cited one instance where a plaintiff received a payout worth less than $150 while the attorneys pocketed $135,000.

But Sen. Gary Farmer, a Broward County Democrat who introduced a number of amendments shot down in committee, said such cases are rare. More important, those cases with high payouts to lawyers usually come when insurance companies refuse to pay out even small claims and force their own policyholders into court. In other words, it’s the insurer forcing their own policyholder to court over a $150 dispute.

Citizens Property Insurance, Farmer said, is among the worst offenders when it comes to intimidating and refusing to make whole their own customers.

Sen. Perry Thurston, a Fort Lauderdale Democrat, also pushed for changes more favorable to attorneys, said the legislation fixes problems that are not broken. Trying to change Florida law to be less protective of consumers because other states offer no such protections moves this state in the wrong direction, he argued.

“We’re not going to deny citizens access to court because of what Texas does,” he said.

The entire debate comes as the state still recovers from devastation from Hurricane Michael and years-worth of court claims.

Joe Busby, a Panhandle property owner who has testified on the legislation in each committee stop, has been involved in disputes over claims from Hurricane Michael damage and said many in the region still await repairs to their homes from that storm. That’s why there still needs to be at least a three-year window on claims, he said, and a limit of two years to file disputes would hurt policy holders.

He also disputed complaints about the rising number of claims, and said that ignores the increase in the number of homes and rising material costs.

Brandes complained that all amendments offered by opposition would maintain the status quo or raise rates.