DeSantis signs bill aimed at reducing cost of Florida home insurance
For years, attorneys have taken advantage of Florida homeowners, lining their pockets with fees while insurance premiums increased. A new law aims to address this.
Gov. Ron DeSantis on June 11, signed into law Senate Bill 76, which aims to reduce the price of property insurance for Florida homeowners by cutting down on rampant litigation abuse.
“I’m proud to sign SB 76 today to continue our mission of insurance reform in Florida,” said DeSantis. “Since my first days in office, I have been committed to doing whatever it takes to reduce the burden of property insurance on Florida families.”
The legislation restructures rules for insurance claim lawsuits and prohibits contractors, public adjusters, or companies from using advertisements to persuade Floridians to make insurance claims for roof damage. SB 76 penalizes violators of the law with fines of up to $10,000.
The claims system has been abused by attorneys in litigation-for-profit schemes who enrich themselves through filing routine property insurance claims. Of the $15 billion paid to litigate insurance claims since 2015, only 8% has gone to policyholders. The vast majority of the money – 71% – has gone to plaintiffs’ attorneys, with an additional 21% spent on the insurers’ defense attorneys. The exorbitant litigation costs force insurers to charge Floridians higher premiums.
SB 76 changes the process by which attorney fees are awarded. If a claimant (homeowner) recovers less than 20% of their demand, the insurer does not need to pay any of the claimant’s attorney fees. If the claimant recovers between 20% and 80%, the insurer will be required to pay that same percentage of the attorney fees. Only if the claimant recovers at least 80% will the insurer be obligated to pay all reasonable attorney fees. This is a significant change from the current system, in which an insurer must pay an attorney fee even if the homeowner only recovers a small amount of money.
SB 76 also cracks down on roof damage claims, which insurers contend are rife with fraud. Companies frequently solicit homeowners to file for roof repairs; under SB 76, that is prohibited. Contractors are prohibited from engaging in conduct that “encourages, instructs, or induces a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage.”
“We are grateful that the Legislature and Governor DeSantis saw the urgent need to act to address insurance market stressors and protect consumers,” said Michael Carlson, the president of the Personal Insurance Federation of Florida. “For too long, bad actors have taken advantage of Florida homeowners, leading to a crisis in the property insurance market. With SB 76 now law, Florida will be able to take several steps toward reform, reducing the cost of property insurance lawsuits that contribute to higher insurance rates.”
Meanwhile, the Consumer Protection Coalition said it was “cautiously optimistic that provisions within the new law will help to mitigate rising coverage costs and lead to more choices for consumers.”
This is not the first piece of property insurance reform legislation passed during DeSantis’ time as governor. In 2019, DeSantis signed HB 7065 to reform the Assignment of Benefits (AOB) process. “I thank the Florida Legislature for passing meaningful AOB reform, which has become a racket in recent years,” DeSantis said at the time. “This legislation will protect Florida consumers from predatory insurance practices.”
DeSantis has also trumpeted the impact of his judicial appointments, which include three of the sevencurrent justices on the Florida Supreme Court. In December 2020, the Court issued a ruling that DeSantis hopes “will reduce needless litigation, forum shopping, and other practices that drive up the price of property insurance for businesses and families.”
After years of skyrocketing premiums, the signing of SB 76 this month provides cause for hope for Florida homeowners.