LEGISLATIVE UPDATE 2021 – Governor DeSantis Signs New Property Insurance Reform in Florida
On June 11, 2021, Governor Ron DeSantis signed into law Senate Bill 76, addressing property insurance costs, roofing contractor practices, and improving upon the overall insurance market in Florida. The Governor’s office lauded the bill as an additional protection to Florida families by restructuring litigation rules for disputed insurance claims, expressly disallowing contractors and public adjusters from advertising insurance claims for roof damage, and imposing fines up to $10,000 when companies or individuals violate the law.
Homeowner property insurance rates have seen significant increases in recent years caused in part by a flood of homeowner claims and litigation. This has led to the abandonment of the Florida market by many of the large insurers and currently threatens the viability of the remaining 60 independent private insurers still operating in the State. It has also contributed to increased pressure on Citizens Insurance, the not-for-profit government entity providing insurance to those who cannot find private coverage.
To combat the excess litigation and improve the overall Florida insurance market, the main provisions of the bill include the following:
- Replaces the one-way attorney fee statute (Section 627.428, Fla. Stat.) and limits attorney “multiplier fees” by making the recovery of attorneys’ fees and costs contingent on obtaining a judgment for indemnity that exceeds the pre-suit offer made by the insurance company.
- Reduces the claim deadline on all claims from three years to two years from the date of loss, except for supplemental claims which will have an additional one year.
- Requires plaintiffs to file a pre-suit demand at least ten days before filing a lawsuit that includes an estimate of the demand and the attorneys’ fees and costs demanded and the amount in dispute (Section 627.70152, Fla. Stat.).
- Allows an insurer to require mediation or other forms of dispute resolution after receiving a pre-suit notice.
- Provides relief for Citizens Insurance by gradually raising the cap on insurance rate hikes from 10% to 15%.
As referenced above, the law also addresses predatory practices by companies and public adjusters by prohibiting door-to-door, electronic and telephonic solicitations to homeowners offering items of value in return for roof inspections and roof damage claims. Likewise, contractors performing the roofing repairs could face monetary fines for performing repairs for an insured without a detailed cost estimate of the labor and materials required to complete the repairs. These changes are codified in newly created Section 489.147, Fla. Stat. and Section 626.854(20), Fla. Stat.
One of the more impactful features of the bill tackles the issue of prevailing party attorneys’ fees for insurance-related litigation. The new law, which creates Section 627.70152, Fla. Stat., provides that if a claimant recovers at least 50% of the disputed amount (the difference between the pre-suit demand and the award obtained at trial), the claimant would be awarded his full fees and costs. However, if the award obtained is less than 20% of the amount in dispute, no fees are awarded to the plaintiff’s attorney. Awards between 20% and 50% of the disputed amount would result in a proportional award of fees and costs. This change to attorney fee statutory requirements aims to disincentivize the excessive and frivolous litigation currently impairing the insurance marketplace.
Senate Bill 76 goes into effect on July 1, 2021. While the goal of the legislation is to address cost increases and help stabilize rates for consumers, more will likely need to be done to attract the larger insurers back to the market and provide affordable insurance alternatives to Florida citizens.