Report: Florida home to three-quarters of U.S. property insurance lawsuits

A new report from the state’s Office of Insurance Regulation found Florida accounted for over 76% of all homeowners’ litigation in the United States in 2019.

The data comes from an OIR review of the National Association of Insurance Commissioners Market Conduct Annual Statement (MCAS) Data Call, covering 2016-2019. While Florida exceeded the rest of the nation in homeowners’ insurance litigation, the state accounted for only 8% of homeowners’ insurance claims nationwide.

In an April 2 letter addressed to House Commerce Committee Chair Blaise Ingoglia, Insurance Commissioner David Altmaier said the trend is not new. Of all homeowners’ insurance litigation in the U.S., 64% opened in Florida in 2016, 68% in 2017, and 80% in 2018.

Property insurance reform has been one of the Legislative Session’s most contentious topics. Insurance rate increases, coverage restrictions, insurers leaving the market, and policies rapidly funneling back into the state-backed Citizens Property Insurance Corp. have all garnered attention.

The debate over how to best address rising property insurance rates in Florida hinges on arguments over the amount of litigation occurring.

Proponents of litigation reform say curbing frivolous lawsuits and attorney’s fees are necessary to halt consumer rate increases. Opponents say that insurers should be better at paying claims and that the Senate’s reform bill (SB 76) would restrict consumer access to the courts.

Altmaier’s letter outlined several proposals for legislative consideration, including reforming the state’s one-way attorney’s fee statute to remove incentives for illegitimate litigation, adopting a “rare and exceptional” framework for attorney contingency fee multipliers, removing incentives for illegitimate roof replacement claims, and emulating Texas’ 2017 insurance reform law that requires claimants to give insurers 61 days-notice before filing suit and creates a formula for calculating attorney’s fees.

“These solutions could substantially reduce the litigation associated with claims, bringing more certainty into Florida’s property insurance market. Ultimately this will provide more stability in the market and more rate stability for consumers,” Altmaier wrote.

Last week, the Senate passed SB 76 by Bradenton Republican Sen. Jim Boyd. Meanwhile, HB 305 by Rep. Bob Rommel, a Naples Republican, has one committee hearing left before it reaches the House floor.

OIR Letter by Andrew Wilson on Scribd