Peter Schorsch
Florida lawmakers on Wednesday approved a bill aimed at addressing problems with the state’s property insurance crisis, and that measure is earning applause from representatives of the insurance industry..
The measure (SB 2A) now heads to Gov. Ron DeSantis for his signature.
“This is a pro-consumer bill that should drive down litigation abuse and put the property insurance market on a path to stability,” said Personal Insurance Federation of Florida (PIFF) President and CEO Michael Carlson.
“The Legislature is right to focus on lawsuits, and Senate Bill 2A includes bold provisions, including the prohibition of the one-way attorney fee, to fully address the property insurance litigation environment in Florida. We are hopeful this outcome will stop Florida from having to play whack-a-mole with new insurance schemes, and we are grateful for its swift passage as it heads to Governor DeSantis.”
If signed, the bill will eliminate assignment of benefits for property claims; do away with one-way attorney fees for property claims; reform the first-party bad faith law to require breach of policy to be proven before the claim can be made; reduce the initial claims filing period from two years to one; permit arbitration and other dispute resolution; and permit the use of proposal for settlement for multiple claimants.
Supporters of this method of property insurance reform believe costs have been passed on to consumers as a result of high litigation costs within the market. That, they argue, has also driven companies out of Florida or out of business entirely, limiting insurance supply even as demand soars.
In 2021, Florida represented 7% of property insurance claims nationwide, yet was home to 76% of insurance litigation, according to data from the Florida Office of Insurance Regulation.
“The Legislature is to be commended for taking aggressive action on this issue during a time of crisis, and we applaud Speaker (Paul) Renner, Chair (Tom) Leek, Chair (Bob) Rommel, President (Kathleen) Passidomo and Chair (Jim) Boyd for taking on this critically important issue,” Carlson said.
“These provisions will reduce the incentive to sue in order for attorneys to profit from fees, and provide relief to Floridians paying attorneys’ salaries through their higher insurance premiums.”
One-way attorney fees in Florida are meant to shield policyholders from legal bills if they need to sue an insurer, but critics say attorneys and contractors exploit the law to file unnecessary suits with the goal of collecting attorney fees. Critics say it has created an unstable insurance market, driven ratepayer fees higher, reduced coverage options, created insurer insolvency and burdened Citizens Property Insurance Corporation, the state’s insurer of last resort.
PIFF is an industry group advocating on behalf of Florida’s insurers, representing national carriers and their subsidiaries. PIFF members write more than $13 billion in premiums in Florida. The group’s mission is to advocate for “a healthy and competitive insurance marketplace for the benefit of Florida consumers.”
3 comments
tom palmer
December 14, 2022 at 4:59 pm
As long as the industry is happy; who in Tallahassee cares about their customers? Glad to see this GOP website returning to form.
Mands
December 17, 2022 at 12:25 am
This looks to me like protection for the insurance companies and not the insured. Plus the insurance industry “applauds it” so what does that tell you?
Insurance companies get sued because they deny most claims or try to lowball payouts. Not allowing the insured to recover attorney’s fees just puts more power in the insurance company’s hands because insureds will be afraid to sue if they have to pay a lawyer and then still lose. What an insured will pay out in attorney’s fees would negate any potential recovery they receive. Pay $5,000 in attorney fees to try and get a $7,000 claim approved – you net $2,000 of your $7,000 claim.
I also guarantee you insurance rates WILL NOT come down. Insurance companies will pocket the extra money. Help the insureds, not the insurance companies. Many people pay premiums for decades and when a claim is filed, it gets denied.
About the only thing I agree with is eliminating the AOB because unscrupulous contractors abuse AOB.
Bob
December 19, 2022 at 8:18 am
This is an anti-insurers talking point that simple doesnt make logical sense. All the insurers I have ever worked for would much rather pay a legitimate claim (especially since its less work) than going through all the hoops necessary to deny one, respond to CRNs, go through litigation, etc. The issue is when there is a $50,000 loss, the PA (who is also a licensed contractor (no conflict there)), submits a $5,000,000 proof of loss with no accompanying documentation and demands appraisal or sues the insurer with no cooperation. The bill is necessary for insurers, because without insurer relief, premiums are skyrocketing. Its necessary for insureds because without insurance, a bank wont loan you money to buy a property. The insurer I work for pulled out because there is no money to be made. If there was, insurers wouldnt be pulling out.
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