Bill to curb property insurance lawsuits, costs, clears Senate panel

Image via AP.

Insurers, trial lawyers, and lawmakers from both parties agree Florida’s property insurance market is in “crisis,” but a consensus on what to do about it remains elusive with less than two weeks remaining in the Legislative Session.

One week after St. Johns Insurance Co., an Orlando-based property insurer, went into receivership, lawmakers are still grappling with how to counter rampant lawsuits, sharp rate hikes and moves by some insurers to stop writing new business or even non-renew policies.

The Senate Appropriations Committee on Monday passed SB 1728, which contains a slew of provisions aimed at reducing lawsuits and limiting costs related to roof damage claims, something insurers claim is driving up their losses.

“We have got to get our arms around this problem,” said Sen. Jim Boyd, a Bradenton Republican and sponsor of the bill. “It’s costing (homeowners) sums most of them can’t afford to pay any longer.”

The bill allows insurers to limit coverage of roof damage to the “stated value” of a roof, rather than on a depreciating scale over time and allows insurers to require a special roof deductible of up to 2% of the coverage limits.

There are also provisions aimed at limiting the policies in Citizens Property Insurance, the state-run insurer designed to cover homes the private market deem too great a risk. For the last 10 years, lawmakers have sought to reduce the policies in Citizens and the overall risk it carries. The bill requires a Citizens customer to move to a private insurer if they receive an offer under 20% more than their Citizens premium.

Trial lawyers and some lawmakers have opposed the bill, noting the Legislature passed SB 76 last year, limiting attorney’s fees in some cases and would like to see what effect it has before passing another slate of property insurance reforms.

The committee rejected two amendments from Sen. Daryl Rouson, a St. Petersburg Democrat, to remove provisions that allow insurers to be paid attorney’s fees for cases dismissed by the courts and to add the special roof deductible. The attempted amendments were backed by the Florida Justice Association, the main trial lawyer lobby group.

“FJA recognizes that rates are too high. But putting it on the homeowner in this way does not address this problem,” William Haselden of the FJA said of the deductible provision.

Monday’s vote means the bill will head to the Senate floor, but there remain large differences with the House version of the measure, HB 1307. That bill was amended last week to prohibit lobbyists from being on the Citizens board, a provision aimed at Marc Dunbar, the only lobbyist on the board. The Senate version doesn’t include that provision.