After Months of Decline, Florida Claims Litigation Rose Sharply in January

Just when insurers saw signs that last year’s reform legislation may be having an impact on claims litigation, bad news appeared in the inbox Wednesday.

CaseGlide, the maker of litigation management software, which also tracks claims disputes, reported that the number of new litigated claims for the 17 largest P/C insurers in Florida were just under 4,600 in January – a 37% increase from December. That followed an almost steady decline from July’s high of 6,633 litigated claims, the company said.

“January’s steep increase could be the result of a return to normalcy following the holidays, or it could be that claims are now flowing through SB 76’s new process and into litigation,” said Wesley Todd, CEO of CaseGlide. “It bears mentioning that these numbers alone likely aren’t enough to assess the state of the market.”

Senate Bill 76, approved by the 2021 Florida Legislature, aimed to curtail solicitation by roofing companies and to reduce the amount of litigation filed over property damage claims. Insurers have said that unnecessary lawsuits are driving up costs, forcing higher premiums and causing some carriers to stop writing new policies.

The law, which took effect last summer, requires plaintiffs to file pre-litigation notice in order to give insurers more time to settle or take other steps to avoid litigation.

If those pre-suit notices are included in the count, “insurers may unfortunately still have a similar total exposure to what they had in 2020 when the Legislature first started considering SB 76,” Todd said.

He suggested that the notices should be included in the monthly totals, to give an accurate picture of the amount of litigation in the state.

“Although actual lawsuit volumes have decreased since Senate Bill 76 became effective, Florida insurers’ litigation exposure is still concerning,” Todd said.

The data also show that assignment-of-benefit cases as a percentage of new litigated claims, dropped slightly in January. CaseGlide found that 31% of litigated claims were AOB-related, compared to 33% in December. That’s a significant increase from the first six months of 2021, when AOB cases were about 17% to 20% of total claims litigation.

The assignment-of-benefits cases continue to be driven by a few contractors, CaseGlide reported. The top 10 AOB contractors in Florida represented 35% of all AOB claims dispute litigation, and the top contractor was responsible for 12%. The firm has declined to name those contractors.

Miami-Dade County represents 23% of new litigated cases, with Broward County at 17%, Hillsborough County at 7%, Palm Beach County at 6%, and Orange County, home of Orlando, at 6%.

In October, Todd suggested that SB 76 may be having an impact on the number of lawsuits filed. But this week he said the jury is still out.

“It’s still too early to tell if SB 76 will lead to decreased litigation frequency and severity,” Todd said. “Everyone is investing a lot into the new process to create a better insurance environment for all Floridians. As the data continues to develop, we will get a clearer picture.”