January 27, 2022

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SB76: Florida’s Attempt to Lower Insurance policy Litigation and Attract Insurance coverage Carriers | Bressler, Amery & Ross, P.C.


            On July 1, 2021, Florida’s Senate Invoice 76 (“SB76”), which modified various provisions that effect Florida’s assets insurance coverage litigation, went into outcome. This bill was Florida’s hottest endeavor to stabilize the soaring insurance policy rates and lower the burden on Citizens House Insurance Corporation (“Citizens”) by encouraging personal carriers to write new policies on homes in Florida. In practical terms, Florida’s house homeowners are struggling with double-digit coverage price improves, restricted coverage, or being forced to switch to the state’s insurance provider of past resort, Citizens. The Florida Workplace of Insurance policy Regulation (“OIR”) authorised 90 fee will increase from insurance policy carriers in excess of the previous yr. Even though numerous shoppers been given rate increases as superior as 45{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, other individuals gained notices of nonrenewal or outright cancellation from non-public carriers.

            Numerous insurance policy carriers are unwilling to insure houses in Florida, where by  homeowner’s insurance policy lawsuits accounted for 76{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of all litigation in opposition to insurers throughout the region in 2019. “When Florida accounts for only 8 {1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the nation’s house insurance claims but 76 {1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of national residence insurance policies litigation, you know there is a problem,” stated Mark Wilson, president and CEO, Florida Chamber of Commerce. Some who oppose the new legislation simply call it a massive acquire for insurance plan companies. Other individuals, who guidance its passage, say it will preserve the Florida housing marketplace from collapse and really encourage personal insurers to do small business in Florida. Whichever side you take, studies display that the number of problems-claimed lawsuits submitted in Florida about the past 7 or 8 many years has quadrupled. The Florida Legislature clearly hopes to control pricey litigation with SB76, which alters a number of insurance-linked statutes.

Attorney’s Charges:

            Given that 2019, Florida Statute Section 627.428 has awarded attorney’s fees to anyone who acquired a judgment in opposition to an insurance plan provider for breach of an insurance policies coverage. This intended that if an insured was awarded a $1 judgment at demo, the carrier would then be liable for hundreds of hundreds of pounds in attorney’s charges and prices. With the enactment of the revisions provided in SB76, on the other hand, there is a new framework for figuring out no matter if an insured will be entitled to get better fees and charges and if so, what percentage can be recovered. Florida Statute Section 627.428 now refers to a recently produced statute, Segment 627.70152, and sets forth percentages of restoration based on the volume of the judgment vs . the pre-accommodate disputed sum. Precisely:

  • If the variance among the amount of money obtained by the claimant and the pre-match provide is considerably less than 20{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed amount of money, every single celebration pays its own expenses and fees
  • If the big difference amongst the quantity obtained and the pre-accommodate offer is at least 20{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} but a lot less than 50{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed quantity, then the insurer pays the plaintiff’s expenses and expenses equal to the proportion of the disputed amount of money acquired and
  • If the variance among the award and the pre-match give is higher than 50{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed amount, then the insurer pays for the total amount of money of service fees and expenses.

            For illustration, if an insured’s pre-match demand is $20,000 and the carrier offers $10,000, the total in dispute is $10,000. If a jury awarded the insured $1,000, then the insured would only have received 10{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed volume and every single get together would fork out its possess charges and costs. If a jury awarded the insured $3,500, then the insured would have obtained 35{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed amount, and would be entitled to recover 35{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of their attorney’s fees and fees. Last but not least, if a jury awarded the insured anything at all in excess of $5,000, then the insured would have exceeded 50{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} of the disputed total and the provider would be liable for all attorney’s expenses and charges.

            The disputed total is alone established by the now-needed pre-go well with Discover of Intent to Initiate Litigation (“NOI”). This is done by way of a type offered on the internet by the Section of Financial Solutions (“Department”) and is a pre-requisite for any insured who desires to file a lawsuit from an insurance plan provider primarily based on a declare for damages. Among the other issues, the insured have to discover the alleged acts or omissions providing increase to the accommodate, an estimate of damages (if acknowledged), and the presuit settlement demand, itemized by damages, attorney’s charges, and charges. These NOIs are community data and, although not quite a few seem to have been submitted, it seems that at the very least some do not contain a presuit demand from customers. This is mandated by the statute, but apparently not by the Department’s NOI sort. As these, applying the new version of the attorney’s charge statute may perhaps result in more litigation than the Legislature hoped.

Prohibited Advertising and marketing:

            SB76 also attempts to address most likely predatory techniques by roofers and contractors, who have solicited enterprise by encouraging insureds to file insurance coverage statements, through the language of Florida Statute Segment 489.147. Particularly, contractors simply cannot engage in “prohibited advertis[ing],” nor can they supply a household house operator a price cut in exchange for the contractor conducting a roof inspection or distributing an insurance policy declare for the roof on behalf of the property owner.

            A prohibited advertisement, below this segment, indicates “any prepared or digital communication by a contractor that encourages, instructs, or induces a client to contact a contractor or general public adjuster for the goal of creating an insurance policy declare for roof injury.” Prohibited promotion particularly involves, “door hangers, enterprise cards, magnets, flyers, pamphlets, and e-mails.” In addition, contractors and roofers can not engage in any policy interpretation or advise an insured about their duties less than the insurance policy, except if they also keep a community adjuster’s license. Fines up to $10,000 can be imposed for just about every violation, that means every single unique business card or flier. This could increase up quickly, provided the prevalence of this sort of advertising and marketing packages.  

            At the very least just one roofing firm, Gale Force Roofing & Restoration, LLC (“Gale Force”) has attempted to problem this new regulation. On June 21, 2021, Gale Drive submitted a Complaint for Declaratory and Injunctive Aid in the United States District Court docket, Northern District of Florida, arguing that SB76 infringed on Gale Force Roofing’s appropriate to the flexibility of speech. On the other hand, on June 29, 2021, Chief United States District Judge, Mark E. Walker, entered an purchase dismissing the criticism without the need of prejudice, noting that it “is not pleased that it has jurisdiction to hear [the] situation.” Gale Force filed its First Amended Grievance on June 30, 2021. On Sunday, July 11, 2021, Choose Walker issued a preliminary injunction, ordering that no methods could be taken to enforce Florida Statute Segment 489.147(2)(a), (3), and (4)(b) as they pertain to “prohibited advertisements” until finally or else requested.

Time to Report Promises:

            Given that 2011, Florida Statute Part 627.70132 has minimal the total of time for everyone to report a hurricane or windstorm declare to an insurance policies provider to a few (3) years from the time the “hurricane made landfall” or the “windstorm triggered the covered hurt.” As of July 1, 2021, that time to report a declare or a re-opened assert has been lowered to two (2) years and encompasses promises “for decline induced by any peril.” The time for reporting a “supplemental claim” continues to be a few (3) yrs.

            Supplemental claim is described as “a claim for further loss or hurt from the same peril which the insurance company has earlier modified or for which costs have been incurred while finishing repairs or substitute pursuant to an open assert for which timely see was earlier presented to the insurance company.” Reopened claims is described as “a claim that an insurance provider has formerly closed, but that has been reopened on an insured’s request for added expenses for decline or damage earlier disclosed to the insurance provider.” This appears to be to differentiate that a reopened declare is an additional request for damages that have been formerly disclosed, even though a supplemental assert is an more request for damages that have been uncovered later arising out of the very same reduction. It looks completely possible that there will be more litigation about the definitions of reopened and supplemental claims to decide which time limitation applies.

Provider Reporting Necessities:

            SB76 also involved language amending Florida Statute Segment 626.424, which sets forth the facts that all carriers need to report to the Condition. This facts is considerable, ranging from policy varieties and zip codes the place statements happened, to suppliers made use of for mitigation and the quantity compensated for claimants’ attorney’s expenses. This is clearly intended to assistance the Legislature decide no matter whether the provisions of SB76 are serving their supposed goal.


            Even though SB76 does include things like some useful provisions, it looks not likely that these who have benefitted from so numerous insurance coverage statements currently being filed will submit to these variations quietly. However, with the intent of the statutory changes plainly staying to reduce litigation and entice private carriers to return to producing residence insurance coverage policies in Florida, we are hopeful that the courts will aid in carrying out the Legislature’s goal.

(1) The authors thank legislation clerks Kalie Maniglia and Steven Jeffries for their help in getting ready this consumer notify.