Senate Bill 2A to Create Stability in Market, Protect Consumers
During a special session on insurance, Florida lawmakers today passed historic legislation that aggressively addresses problems deepening Florida’s property insurance market crisis. Senate Bill 2A now heads to Governor Ron DeSantis.
“This is a pro-consumer bill that should drive down litigation abuse and put the property insurance market on a path to stability,” said Personal Insurance Federation of Florida (PIFF) President and CEO Michael Carlson. “The Legislature is right to focus on lawsuits, and Senate Bill 2A includes bold provisions, including the prohibition of the one-way attorney fee, to fully address the property insurance litigation environment in Florida. We are hopeful this outcome will stop Florida from having to play whack-a-mole with new insurance schemes, and we are grateful for its swift passage as it heads to Governor DeSantis.”
Litigation reforms included in this historic legislation include:
- Eliminating AOB for property claims
- Eliminating the heavily abused one-way fee law for property claims
- Continuing to reform first-party bad faith law to require breach of the policy be proven before a bad faith claim can be made
- Reducing the initial claims filing period from two years to one year
- Permitting arbitration and other alternative dispute resolution to resolve disputes
- Permitting use of proposal for settlement for multiple claimants
Laws in Florida have been abused to the point that litigation costs are driving insurance companies out of Florida or out of business, even without catastrophic storms hitting the state. Data gathered by the Florida Office of Insurance Regulation underscores the problem: In 2021, Florida represented 7% of property insurance claims and 76% of property insurance litigation nationwide.
“The Legislature is to be commended for taking aggressive action on this issue during a time of crisis, and we applaud Speaker Renner, Chair Leek, Chair Rommel, President Passidomo and Chair Boyd for taking on this critically important issue,” added Carlson. “These provisions will reduce the incentive to sue in order for attorneys to profit from fees, and provide relief to Floridians paying attorneys’ salaries through their higher insurance premiums.”
Florida’s unique one-way attorney fee statute is intended to shield policyholders against legal bills if they need to sue their insurers. However, unscrupulous attorneys and contractors exploit the law to file unnecessary lawsuits against insurers. Their goal is to seek attorney fees, and the results in Florida are an unstable insurance market, increasing rates, decreasing coverage, insurer insolvencies, assessments by FIGA (the guarantor of payments for insolvent insurers), and an increase in the policy count for Citizens Property Insurance Corporation.
View the four ways of compensating attorneys for
representing insureds in a civil lawsuit against an insurer.
About PIFF
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.
