Last Friday, June 11th, 2021, Florida Gov. Ron DeSantis signed SB 76, a bill designed to protect Floridians by restructuring the litigation process for disputed insurance claims. The hope is that the legislation will make property insurance premiums more affordable and help stabilize the insurance process in Florida as a whole by encouraging more private sector involvement. Ideally, it will also draw more insurance carriers to the state.
According to Insurance Journal, the key provisions of the bill are as follows:
- Changes the eligibility, rate glide path, and actuarially sound rate indication for Citizens Property Insurance Corp.
- Replaces the one-way attorney fee statute to make the recovery of attorney fees and costs contingent on obtaining a judgment for indemnity that exceeds the pre-suit offer made by the insurance company.
- Reduces the claims deadline on all claims to two years from the date of loss, except for supplemental claims, which will have an additional year.
- Requires plaintiffs to file a pre-suit demand at least ten days before filing a lawsuit against an insurer that includes an estimate of the demand, the attorney fees and costs demanded, and the amount in dispute; disallows pre-suit notices to be filed before the insurance company can make a determination of coverage; and allows an insurer to require mediation or other form of alternative dispute resolution after receiving notice.
While the bill does not go into effect until July 1st, 2021, many supporters say they have seen a positive impact from it already. Rep. Bob Rommel, who helped work on the bill in the House, said that some insurance carriers are already more willing to do business in Florida since the bill was signed.
Additionally, Sen. Jim Boyd said, “Homeowners property insurance rates have increased by 20, 30, 40 percent or higher in some cases. Since 2013, $15 billion has been paid out in claims in Florida. From those funds, 71 percent went to attorney fees, 21 percent to insurers’ defense costs, and a mere 8 percent went to the property owners for their losses… With the passage of SB 76, I believe we will see a downward impact on those rates.”
Others, however, feel that more will need to be done before Florida sees the results this bill is working towards, noting that two provisions that industry experts say are crucial to stabilizing the market were left out of the bill. These provisions included the elimination of the state’s attorney fee multiplier and the implementation of policy language to mitigate roof replacement costs.
Despite these missing provisions, the bill tackles the issue of increased roofing claims and litigation that many Florida insurers have noticed. The bill makes it illegal for roofing contractors or anyone associated with them to solicit to insureds. Roofing contractors will also need to provide a detailed cost estimate to insureds before performing any labor, with violators being charged up to $10,000 in fines.
In the words of Florida House Speaker Chris Sprowls, “Today’s reforms to our property insurance market help protect [the American Dream] for decades to come by bolstering the market, increasing affordability, and protecting consumers from fraud and abuse.” Only time will tell the effects of SB 76 to come.