Legislation Prioritizes Market Stability and Consumer Protection
TALLAHASSEE, Fla. (May 23, 2022) – An agreement has been reached between the House and Senate as Florida lawmakers convene for a special session beginning today to address Florida’s deepening property insurance market crisis.
The legislative agreement embodied in House Bill 1D and Senate Bill 2D, filed by Rep. Jay Trumbull (R-Panama City) and Sen. Jim Boyd (R-Bradenton), respectively, marks a significant step forward, building upon legislative successes in 2019, through House Bill 7065, and 2021, through Senate Bill 76.
“Governor DeSantis is to be commended for forging a consensus on common sense reforms that will help relieve the market from unnecessary litigation,” said Personal Insurance Federation of Florida (PIFF) President and CEO Michael Carlson. “We must continue to chip away at the litigation-for-profit machine that encourages lawsuits — primarily benefiting trial lawyers — and increases claims costs and the overall cost of property insurance. With further reforms, we will help improve conditions in the market, and Floridians will benefit.”
House Bill 1D and Senate Bill 2D include four important legal reforms:
- Barring assignees under an assignment of benefits from using the “one-way” fee law that was designed to protect consumers;
- Preventing trial lawyers from abusing Florida’s bad faith laws in property lawsuits by requiring a showing that the insurer breached the contract before a bad faith suit can prevail;
- Limiting the application of the attorney fee contingency risk multiplier to rare and exceptional circumstances, adopting the federal standard for such multipliers;
- And permitting insurers to seek attorney fees in cases where a claimant files a lawsuit without first filing a required notice of intent to initiate litigation.
“With this deal, the Legislature will continue to make progress in addressing Florida’s man-made insurance litigation crisis, which has been a chronic contributor to increasing insurance rates and market instability,” Carlson added.
A MARKET IN CRISIS
- Nationwide Florida had 9% of all the property insurance claims filed in 2021 and yet 79% of all the lawsuits filed on property claims nationwide occurred in Florida.
- The Florida property insurance industry has seen two straight years of net underwriting losses exceeding $1 billion each year.
- Between 2016 – 2019, insurers saw an average combined ratio of 117.5 percent. This means for every hundred dollars collected in premium, insurers paid $117.50 in losses and expenses.
- Many insurers have significantly reduced their operations in Florida. In the past 5 years, a number of property insurance companies have gone out of business.
- Florida’s Insurance Guaranty Association (FIGA) is issuing assessments for the first time in 10 years due to the recent insolvencies, and more are expected. These assessments will be added to everyone’s property insurance policy in addition to the premium cost.
- Citizens Property Insurance Company, the insurer of last resort, is getting close to 1 million policies and growing at a rate of 6,500 policies a week. Like FIGA, if Citizens runs a deficit, they can assess your insurance policy whether you have a Citizens policy or not.
The Personal Insurance Federation of Florida, Inc. (PIFF), is a leading voice for the personal lines property and casualty insurance industry in Florida. PIFF represents national insurance carriers and their subsidiaries, including many of the state’s top writers of private passenger auto and homeowners multiperil insurance. Together, PIFF members write more than $13 billion in premium in the state. PIFF advocates for a healthy and competitive insurance marketplace for the benefit of Florida consumers. Follow us @PIFFNews. Visit PIFF.net to learn more.
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Allison Aubuchon, APR | 850.766.5255