Contractors group sues to stop new property insurance law

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'The new law makes it economically unfeasible for contractors to pursue legal remedies in court and gives insurers even more incentive stall payments.'

Five days after Gov. Ron DeSantis signed SB 2D, the measure aimed at stabilizing Florida’s troubled property insurance market, a lawsuit was filed against it in Leon County Circuit Court.

The Restoration Association of Florida, a trade group for contractors, filed the suit against the state on Tuesday. The organization is asking the court to strike the new law down because it treats contractors differently to other citizens and denies them access to the courts.

A provision of the law eliminates attorneys’ fees for cases involving assignment of benefits, or AOB, when a homeowner signs the benefit of an insurance policy over to a contractor who then pursues the claim with the insurer. The fees remain intact for homeowners’ attorneys.

The suit alleges that the provision violates the Equal Protection Clause of the U.S. and Florida Constitutions, and that taking away those fees it makes it almost impossible to find lawyers to represent them in a dispute with an insurer.

“Most of the claims that contractors submit to insurers under AOBs are for relatively small amounts of money,” RAF President Richie Kidwell said in a released statement. “But when the insurers delay, underpay, or deny payment for valid claims, these businesses have little choice besides taking them to court. By denying contractors the right to recover reasonable attorney fees, the new law makes it economically unfeasible for contractors to pursue legal remedies in court and gives insurers even more incentive stall payments.”

Kidwell spoke against the bill last week in House and Senate committee hearings during the Legislature’s Special Session, convened by DeSantis to address a property insurance market beset by bankruptcies, cancellations, and skyrocketing rate increases.

Department of Business and Professional Regulation Secretary Melanie Griffin and Donald Shaw, Executive Director of the Construction Industry Licensing Board, are named in the suit. They lead the agencies that regulate professions involved in housing repairs, such as roofing and mold restoration.

The lawsuit also claims the entire law should be struck down because it violates Florida’s constitutional prohibition against multiple subjects in a single piece of legislation. The bill is related to property insurance but contains several provisions across a wide range of areas under that heading, including reinsurance, new parameters for regulators and a mitigation program for homeowners.

But most of the 29-page suit takes aim at the provision eliminating attorneys’ fees for AOB lawsuits.

“There is no rational basis, let alone compelling government interest, to justify denying the assignee a right to prevailing party attorneys’ fees,” the lawsuit states. “Doing so will only encourage insurers to continue delaying, underpaying, and denying legitimate assignee claims, resulting in an unfair and improper windfall for recalcitrant and fraudulent insurance practices.”

RAF’s suit follows on the heels of another lawsuit filed earlier this month, alleging that Insurance Commissioner David Altmaier allowed regulators to approve changes to insurance policies that violate state law, including allowing insurers to require disputed claims to avoid the courts and be mediated.

Gray Rohrer


  • TK Hammer

    June 1, 2022 at 12:48 pm

    I’ve been in independent insurance adjuster in Florida for 17 years and I see a lot of shenanigans with AOBs particularly with Apex roofing. There is some shenanigans that goes on and these roofers are not looking for the best interests of the homeowner they tell every single person they see they need a roof in the file a claim most time when it’s not directly after a storm it’s just wear and tear and age and deterioration. I understand it’s a numbers game for them but they’re using abusing the system when they fight for more and more and more and it doesn’t go to the homeowner only towards their profit and bottom line.

  • Tomas

    June 13, 2022 at 7:38 am

    This should be against the law. I would expect better than this from Republicans. Property insurance do not pay claims and wait for 3 years. They will make a lot of Restoration business go out of business with this new law. I own one and I go through a lot of depression due to not getting checks. We are fair they don’t pay not even 500$


      June 13, 2022 at 5:26 pm

      Why should this be against the law? The insurance contract is between the insured and the insurer, which is separate than the job contract between the contractor and the property owner. If the insured fails to pay you just sue the property owner. Very convenient that contractors are crying foul when the majority of them rip off property owners and take off and leave no recourse to sue because they shutdown their business and open somewhere else under a new name.

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