Legislation clarifies coverage for roofs, creates two-year filing period for claims
State Senator Jim Boyd (R-Bradenton), Chair of the Senate Committee on Banking and Insurance, today filed Senate Bill 76, An Act Relating to Residential Property Insurance. To address several issues surrounding the rising cost of property insurance in Florida, the bill clarifies insurance coverage related to roof damage and replacement, creates a uniform period for filing a property insurance claim, requires that the insured party provided notice of the claim to the insurance company before filing a lawsuit, and changes how attorney fees are awarded in property insurance litigation.
“We want to make certain that Floridians have access to property insurance that is both reliable and affordable. Right now we have a situation in our state where homeowners are paying more for their property insurance, and yet insurance companies are suffering massive losses,” said Senator Boyd. “These higher premiums and massive losses directly correspond to an increase in claims, many of which are related to roof coverage and filed years after damage occurs, as well as a huge increase in property insurance related lawsuits.”
“Unfortunately Florida has become a beacon for companies who canvass neighborhoods creating roofing claims that would not otherwise be filed, driving up the cost of insurance for everyone,” continued Senator Boyd. “This legislation ensures that there is a clear understanding between homeowners and their insurance companies about when a roof replacement will be covered in full, and when a homeowner will be responsible for paying a certain portion of the replacement cost. It also establishes a clear and reasonable two-year time period for filing a claim.”
The legislation allows property insurers to only offer homeowner’s policies that adjust roof claims to actual cash value if the roof is older than 10 years. A homeowner that is offered such a policy would receive a disclosure that their insurance policy does not provide replacement cost coverage insurance for the roof. The bill also creates a uniform 2-year period for filing a property insurance claim, supplemental claim, or reopened claim.
To address the proliferation of litigation that has driven up the cost of property insurance across the state, the bill requires detailed notice of property insurance claims prior to litigation and changes how attorney fees are awarded.
Specifically, the bill requires that before a lawsuit is filed, the insurer must be notified of the claim in detail and be given sufficient time to inspect the property before a lawsuit is filed.
Currently, an insurer must pay a reasonable attorney fee to the insured’s attorney, even if the insured only recovers a small amount in the litigation. Under this legislation the insurers’ obligation to pay the insured’s attorney fees will be directly related to how successful the insured was in recovering the amount demanded in the litigation.
- If the claimant recovers at least 80 percent, the insurance company must pay all reasonable attorney fees.
- If the claimant recovers 20 percent or more of the demand but less than 80 percent, the insurer will be required to pay the same percentage of fees related to the recovery that the claimant recovered in the action. For example, if the claimant demanded $20,000 and recovered $10,000, the insurer will pay 50 percent of the claimant’s attorney fees because the claimant’s recovery was 50 percent of the demand.
- If the claimant recovers less than 20 percent of the demand, the insurer has no obligation to pay the claimant’s attorney fees.
The bill also adopts the federal court standard for awarding attorney fee multipliers in claims arising under property insurance policies. The bill directs courts to presume that the Lodestar fee is reasonable and provides that multipliers will only be awarded in rare and exceptional circumstances.
For more information, please visit www.FLSenate.gov.