Guest Author
I am an attorney who represents and defends property insurance carriers, but first, I am a consumer and Floridian.
Reversing historic changes that are lowering insurance premiums for hard-working families will be a disaster for policyholders and our state.
For years, insurance premiums only went one direction — up and up again and again due to meritless litigation.
The domino effect threatened our state’s economy and the ability of people to live here.
Lawmakers made bold and historic reforms in recent years, capped by House Bill 837 in 2023 which eliminated “one-way fees” that allowed attorneys to file hundreds of thousands of unnecessary lawsuits with the knowledge that they would lose nothing and stand to gain guaranteed legal fees. It is what I refer to as “spaghetti litigation.”
Let’s throw it against the wall and see what sticks, without regard to the claim’s merits, just to recover attorney fees.
The reason for the change was one of the most fundamental rules of economics: Competition among providers of any service or product means lower costs for consumers. And insurers were reluctant to cover Florida with the very real threat of bottomless litigation.
Frankly, it has been stunning to see how quickly and effectively these reforms have worked.
In just a little more than a year, nearly 100 homeowners and auto insurance companies in Florida have filed for a rate decrease or no change or increase. Since the reforms took effect, 12 new property insurance companies have entered the Florida market.
Last year, Florida had the lowest average homeowners’ premium increases — less than 1% — in the nation. What a stunning reversal. Even auto insurance costs are dropping, with the largest providers asking to reduce rates by as much as 10%.
Why? There are many reasons, but the biggest contributing factor to this change is that litigation has dropped by nearly 30 percent from past peak levels.
I have seen this firsthand. Before these reforms were enacted, 80% of my firm’s practice focused on litigation. Since then, my practice has shifted to only 20% litigation and 80% pre-suit investigation and resolution.
As an attorney representing insurance companies, my firm and I could earn quite a bit more money if lawmakers pass a bill currently on the fast track to passage in the Florida House.
My plea to those lawmakers — please, don’t do it!
Despite my practice and this shift in business, I am thrilled to see this change. Less litigation is almost always better for consumers. The claims that need to be resolved are being resolved before they directly hit my desk with the carriers or through the pre-suit process. This is best for consumers, as it means quick settlements and money in hand for repairs. Rather than years of needless litigation, this is what the consumer needs.
And things are only going to get better. Consider that this rapid stabilization has come during a time of peak inflation and that lingering claims and lawsuits from years ago under the prior statutory regime are skewing the real impact of these changes.
House Bill 1551 will unravel all the progress by bringing back the incentive for lawyers to file as many lawsuits as they can.
Mandating attorney fees in Florida law will not only increase premiums, but it will discourage market competition and scare reinsurers from providing necessary reinsurance. Florida insurers will have no choice but to increase their premium requests again.
Make no mistake: If this bill passes, it will destroy the Florida insurance market and devastate its citizens. Carriers will again begin to leave our state or face insolvency. Homeowners will again see spikes in their insurance premiums, which so many cannot afford.
This bill helps only attorneys. I have faith that lawmakers will recognize the incredible benefits these reforms are bringing consumers and that allowing these successful reforms to keep working is best for all Floridians.
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Katelyn Ferry is a partner at and founding member of Cambo Ferry, PLLC, with offices in Maitland, Tampa, and Miami. Ferry has practiced exclusively insurance defense litigation since 2014 and has focused her practice on the areas of first and third-party insurance coverage and defense.
