By: Erin Dunnavant

Watch out, Floridians! Insurance company lobbyists, your legislature and other Florida politicians in power have hijacked your stockings and instead of protecting what few consumer protections you had left (after significant insurance reform in 2019, 2021 and 2022), are on course to strip you from the rest of your rights, leaving you with insurance policies akin to lumps of coal by the passage of Senate Bill 2A. And what is worse? They are doing it without any promise of lowering or even capping your insurance rates.

Florida’s Constitution expressly provides in Section 21L:

Access to courts.The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.

And just six years ago, the Florida Supreme Court ever so eloquently recognized the important policy behind Florida’s consumer protection statutes, particularly, an Insured’s right to recover their attorney’s fees when they are forced to hire an attorney to fight a claim their insurance company simply could have paid in the first place, in Kathy Johnson v. Omega Insurance Company 200 So.3d 1207 (Fla. 2016). In finding in favor of Ms. Johnson, the Court reasoned:

The need for fee and cost reimbursement in the realm of insurance litigation is deeply rooted in public policy. Namely, the Legislature recognized that it was essential to “level the playing field” between the economically-advantaged and sophisticated insurance companies and the individual citizen…[T]he average policyholder has neither the finances nor the expertise to single-handedly take on an insurance carrier. Without the funds necessary to compete with an insurance carrier, often a concerned policyholder’s only means to take protective action is to hire that expertise in the form of legal counsel. Counsel then have the ability and knowledge to hire an independent engineer or other expert to prepare a report that either confirms or denies the policyholder’s view of the cause of damages. For this reason, the Legislature recognized that an insured is not made whole when an insurer simply grants the previously denied benefits without fees. 

The reality is that once the benefits have been denied and the plaintiff retains counsel to dispute that denial, additional costs that require relief have been incurred. Section 627.428 takes these additional costs into consideration and levels the scales of justice for policyholders by providing that the insurer pay the attorney’s fees resulting from incorrectly denied benefits. Without this approach, we would leave the insured to foot the bill not only for attorney’s fees, but also for experts to overcome the denial, which would render insurance payments insufficient to cover the loss.

This important principle, that is not only at the heart of our State’s Constitution, but was upheld after a careful and well-calculated analysis by Florida’s Highest Court, was already significantly limited by the passage of Senate Bill 76 in 2021,[1] but under the proposed legislation this special session, it will be completely thrown out the window, stripping your rights as a Florida insured completely bare.

Under the proposed law that is being considered during special session as we speak (and will likely pass), you as a Florida insured lose the following rights that you have under the current law if/when the new law takes effect:

  • Despite the very principles established in our State’s constitution and by Florida’s highest Court, you will no longer be entitled to recover attorney’s fees, even if / when your insurance company wrongfully or incorrectly denies, underpays and delays your claim. While you may still obtain an attorney to assist you, you will either need to pay the attorney up front, or you will have to pay them out of the recovery from your insurer that was going to go towards the indemnity or rebuilding of your home, structure or building. So if you cannot afford an attorney, you’ll have to accept your denial or accept pennies on the dollar for your claim or try and fight without an attorney.
    • Note, in this scenario, you may want to explore hiring the help of a Public Insurance Adjuster, who will usually work on a modest percentage, and can be a big help to you. Just keep in mind that they cannot file lawsuits for you if that becomes necessary.
  • You, as a Florida insured, may not be able to access the courts at all depending upon the language in your policy, as the proposed new law permits carriers to write mandatory arbitration provisions into their policies. Depending on the policy, you may also have to foot the bill for the arbitration (if you want a chance to win) as it can be an expensive process by the time you hire an engineer, contractor and potentially a meteorologist or other type of expert needed to prove up your case.
  • You, as a Florida insured, cannot seek or obtain damages for bad faith or extra-contractual damages until and unless you prevail in a summary judgment action or obtain a jury verdict and then final judgment. As most cases are settled before these stages of the litigation, it severely limits the ability to recover for these damages. This will likely result in poorer treatment of you and other Florida insureds and further delays by insurance companies because holding them accountable for these bad acts will be too burdensome.
  • You, as a Florida insured, lose your ability to assign your claim to a third-party, which includes but is not limited to a contractor, water mitigation company, roofing company, or emergency services company. This means, that unless your insurer agrees to pay for these services up front, or the insurer has a vendor that will come out and perform these services at their cost, you must pay for these services (which are sometimes many thousands of dollars) up front. Otherwise, water damages could worsen into mold damages and lead to dangerous living conditions for you and your family.
  • Those of you who may be insured with Citizens Property Insurance Corporation when this goes into effect will have the burden to prove that water damage from a windstorm is wind damage rather than the burden resting with the insurer to prove that flood caused the damages. This burden shifting means that you may need to hire experts at the onset of your claim (at your own expense) if there is a dispute over whether your damages were wind or flood. Under the present law, the onus of the investigation, and thus the burden of proving causation is placed on Citizens (which make sense, as they are a large and sophisticated insurance carrier and not a layperson). You also will be required to pay more for insurance because Citizens will require you to obtain flood insurance.
  • While under the present law, Insurers will send out independent and/or field adjusters to investigate your loss and physically inspect your damages, under the new law, Insurers will be permitted to perform an adjustment of your claim without ever going to the home, building or structure by using photos and digital means to estimate the claim.
  • You will have the time shortened for which you can report an initial claim – now only 1 year from 2, and you now only have 18 months to supplement the claim when this deadline used to be 3 years. This is regardless of how the insurance company has acted and regardless of how long it took the insurance company to investigate, adjust and make a claims determination on the initial claim.
  • Somewhat consistent with the reform of Senate Bill 76 (2021), before filing a lawsuit against an insurer, you as a Florida insured, must file a notice of intent to litigate that must include extensive documentation supporting coverage and the amount of your claim. The problem is that the proposed new law removed the only parts of this process that helped insureds and instead, gave yet more rope to insurance companies to delay and deny claims.
  • Your tax dollars are going towards yet another insurer bailout. Just earlier this year, lawmakers approved the $2 billion in a Reinsurance to Assist Policyholders Program (RAP) to help Florida property insurance companies struggling to obtain enough reinsurance and provide some premium relief for policyholders. Insurance companies received funds by reducing their rates in an attempt to lower premiums paid by consumers. However, while insurance companies are getting millions from the RAP program, policyholders are seeing little to no premium reduction and, in some cases seeing their policies canceled.[2] This new law supports yet another bailout for insurance companies by extending this program.

Yes, I represent Insureds for a living so this negatively affects my business. I am not going to hide behind that. However, I can pivot if I have to and I will be fine.

What I have a problem with is that the ones hurt by this bill the most, are those who have the least and will no longer be able to fight.

As a Florida homeowner myself, thank you politicians for the COAL, especially those who happily took all of the GOLD from Florida’s insurance industry to get elected and sell us out.


[1] Importantly, litigation has been down according to the Office of Insurance Regulation since the passage of Senate Bill 76, but those in power do not want to give the current reform a chance to work before they strip your rights even further.

[2] For example, according to data gathered by the Florida Justice Association, United Property & Casualty received $167 million from the RAP program. The company announced in early December that it would no longer offer property insurance in Florida and that its more than 140,000 policies would be canceled by May 2023, according to the Office of Insurance Regulation.  At the same time UPC is struggling to cover its Florida policies, it has paid its CEO more than $4.2 million annually since 2017.

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