Florida Legislature 2021
By John Haughey/The Center Square
A proposed overhaul of Florida’s property insurance laws designed to dissuade litigation has stalled one step from the Senate floor.
The Senate Rules Committee opted not to vote on Senate Bill 76, filed by Sen. Jim Boyd, R-Bradenton and set it aside for further debate after a lengthy discussion Thursday indicated concerns raised by attorneys and consumer advocates need further vetting.
SB 76 would force claimants, attorneys, and insurers to seek resolutions without going to court by removing “incentives” for legal action in resolving disputes over claims, especially for roof repairs
Proposed reforms in the bill include slashes in the time a policy-holder has to file a claim from three years to two, reductions in “multiplier fees” for attorneys “that discourage settlements” and a provision that allows insurance companies to offer policies that insure only the depreciated value of roofs instead of full replacement costs.
Boyd, an insurance agent, said rising costs for homeowners insurance policies are driving the need for reform. His own homeowner’s insurance costs will go up 40 percent this year, Boyd said.
Noting the number of roof claims going to court has increased from about 27,000 in 2013 to more than 85,000 in 2020, Boyd said the state’s Office of Insurance Regulation (OIR) projects insurance companies in the state will likely double losses from 2019 to 2020.
Litigation is among factors disrupting the state’s property insurance market.
Florida’s businesses and 6.2 million homeowners are seeing – or will see – double-digit rate increases as high as 45 percent in property insurance premiums as insurers cite ballooning reinsurance costs, “loss creep” from 2017-18 hurricanes, and coastal flooding among factors driving costs.
But critics say SB 76 and similar measures, including SB 212, a “contingency risk multiplier” bill filed by Sen. Jeff Brandes, R- St. Petersburg diminishes policyholders’ ability to seek redress in court and would inflict financial pain on homeowners with older roofs.
Florida Justice Association attorney Amy Boggs said SB 76 undermines consumers and benefits corporations.
“It’s giving Goliath an even bigger club to pound David into the sand,” she said.
Untrue, Boyd said. Consumers with legitimate claims against insurance companies can still lodge lawsuits, he said.
“We are not eliminating the ability for constituents to take this to court,” Boyd said, noting SB 76 gives discretion to judges to award fees for policyholders and attorneys.
Joe Busby, a Panhandle property owner who testified before the panel, said many in his region are still awaiting repairs on their homes from October 2018’s Hurricane Michael.
Busby said he is opposed to reducing the three-year claim window to two years and said those citing the increasing number and costs of claims aren’t disclosing the other side of the equation – the increasing number of homes and rising costs of materials.
Brandes said the bill seeks to impose the same standards adopted in 49 other states. Citizens Property Insurance, the state-subsidized insurer of last resort, is sued 1,000 times a month,
“Why? Because of the incentive to go to the litigation slot machine and pull that handle and maybe get one-way attorney’s fees,” Brandes said, citing an instance where a Florida plaintiff received a payout worth less than $150 while the attorneys pocketed $135,000.
The panel shot down several proposed amendments by Sen. Gary Farmer, D-Lighthouse Point, who said proponents such as Brandes were over-stating the frequency of relatively rare extreme court rulings.
Sen. Perry Thurston, D-Ft. Lauderdale, agreed with Farmer, saying SB 76 is a solution in search of a problem and would leave Florida homeowners more exposed than those in virtually any other state and with restricted access to the courts.
“We’re not going to deny citizens access to court because of what Texas does,” he said.