Newly-Enacted Florida Property Insurance Reform Bill Said to Be Already Working
Florida Gov. Ron DeSantis officially signed into law reform legislation on property insurance and roofing contractor practices, a measure some said was having a positive impact even before it went into effect.
DeSantis signed the measure during a June roundtable with sponsors and business groups in Sarasota. The measure — known as SB 76 — officially went into effect July 1.
But, according to several participants at the roundtable, including Insurance Commissioner David Altmaier, some effects are already being realized.
“Already there is a lot of positive as a result of this bill,” Altmaier said. He said insurers and reinsurers have both reacted positively and that he has seen that private carriers are beginning to pick up more homeowners policies across the state.
Rep. Bob Rommel, who worked on the House version of the bill, also said insurance carriers are already showing a willingness to again invest and come into the state since the bill passed.
DeSantis said Florida is “uniquely susceptible to having to respond to natural disasters and that naturally” has an impact on insurance.
He said the bill is a response to many problems that he and the sponsors of the bill saw in the system.
“Many of you know over the last decades, there’s been a lot of ups and downs in this property insurance market in Florida,” he said. “We saw a lot of problems. You’ve seen major premium increases and you have even seen some homeowners, their policies get canceled. They get dumped onto Citizens. So, we wanted to do something to stabilize that.”
DeSantis said the state wants to encourage more private sector involvement and give homeowners policies that are more affordable and that will “protect them from whatever mother nature throws our way.”
“I think we were able to do that,” the Republican governor added.
Supporters hope SB 76 will begin to reduce litigation and control home insurance premiums.
Sen. Jim Boyd, also owner of Boyd Insurance & Investments in Bradenton, said his insureds have been seeing rate increases of 20%, 30% and 50%. “So we needed to do something,” he said.
Boyd said it may take a year to 18 months for rates to come down, but he is confident it will happen.
During a meeting of the Enterprise Florida board of directors, DeSantis said that he thought the legislature did a “pretty good job” addressing the insurance market but that the state is probably going to have to do more, according to the Orlando Sentinel.
Some stakeholders agree with DeSantis that more needs to be done to lower costs and reduce litigation, citing the omission of two provisions the insurance industry said were essential.
The legislation, which passed on the last day of the legislative session, includes changes to the state’s one-way attorney fee statute, the eligibility and glidepath of Citizens, and the deadline to file claims. It also places new requirements and restrictions on roofing contractors.
But two provisions the industry and experts identified as critical to addressing cost drivers and stabilizing the market were left out of the final bill — the elimination of the state’s attorney fee multiplier and a provision allowing insurers to implement policy language to mitigate roof replacement costs. The provisions were sticking points in both legislative chambers.
Industry groups in Florida applauded the signing of SB 76.
“When Florida accounts for only 8% of the nation’s property insurance claims but 76% of national property insurance litigation, you know there is a problem,” said Mark Wilson, president and CEO, Florida Chamber of Commerce. Wilson said the measure “addresses some of the root causes that are rapidly increasing homeowner’s insurance rates. He cited specifically attorney fee reform and roofing solicitation practices that he said have been were driving lawsuits.
“As Governor DeSantis has said before, Florida’s legal system should resolve real disputes and not be used as a game,” said William Large, president of the Florida Justice Reform Institute (FJRI), a legal reform lobbying group. Large also cited the reform of the attorney fee formula. “FJRI believes the new attorney fee formula will encourage more reasonable settlement offers by all parties and discourage non-meritorious claims, and we look forward to seeing the positive impact of this new approach in practice,” said Large
In its key provisions, the legislation signed by DeSantis:
Changes the eligibility, rate glidepath and actuarily 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 on supplemental claims which will have an additional year.
Requires plaintiffs to file a pre-suit demand at least 10 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.
The bill also makes several changes to tackle what insurers claim has been an explosion of roofing claims and litigation, including making it illegal for roofing contractors or any person acting on their behalf to make a “prohibited advertisement,” including an electronic communication, phone call or document that solicits a claim. Offering anything of value for performing a roof inspection, an offer to interpret an insurance policy or file a claim or adjust the claim on the insured’s behalf will also be prohibited.
Additionally, contractors are prohibited from providing repairs for an insured without a contract that includes a detailed cost estimate of the labor and materials required to complete the repairs.
Violations could result in fines of $10,000.