Editorial: Citizens lawsuit numbers ridiculous burden for Florida residents
Charlotte Sun (Port Charlotte, FL)
OUR POSITION: Maybe the legislation to dull the number of lawsuits against insurance providers did not go far enough.
Maybe you read the News Service of Florida story in a recent Daily Sun edition.
If not, do you want to hear something crazy?
Get this. The state-sponsored Citizens Property Insurance Corp., according to the News Service of Florida, will likely spend about $100 million on attorney fees this year to defend lawsuits. We'll repeat that — $100 million.
How much lower do you think Citizens policies would cost homeowners if that wasn't true?
We praised lawmakers for addressing lawsuits over insurance in a spring special session — although everyone knows more reform was needed.
But give them credit for new laws that bar insurers from refusing to cover some homes solely because of an older roof and for putting a limit on how much attorneys can collect in lawsuits against insurance companies.
Legislators also worked to ease the number of lawsuits filed against insurers over disputed claims. Insurance companies have cried out about excessive litigation by lawyers, and fraudulent claims from roofers. New legislation limits an attorney's ability to charge double or triple their normal rates and eliminates automatic payments for attorneys assigned benefits under a lawsuit against insurers. Finally, it made it tougher for contractors to solicit homeowners to make an insurance claim.
All that was good. But, it will take months for the new laws to make an impact and, meanwhile, lawyers and contractors apparently are wasting no time filing a rush of lawsuits while an opening remains.
The Citizens Board of Governors — in December before the Legislature passed the new guidelines — approved $50 million for attorneys to deal with thousands of lawsuits covering disputed claims. Last week, a Citizens committee said it needs another $50 million — a request that will be addressed at a July 13 board meeting, according to the News Service of Florida story.
The huge amount of money being spent on attorneys is a clear indication of the number of lawsuits Citizens — and other insurance carriers — must deal with. The News Service of Florida reports that in the first four months of 2022, Citizens was served with 3,881 lawsuits — or 970 a month — and had 18,455 pending cases as of April 30.
The growth of lawsuits coincides with the rapid growth in the number of policies Citizens has taken on.
Citizens had 883,333 policies as of the end of May, up from 609,805 policies a year earlier and 463,247 policies two years earlier. The numbers swelled as Florida insurers shut down and fled the state or sought to cut the number of properties they insured.
So what is the state to do?
Right now, lawmakers' hands are tied because there won't be another special session in an election year and most lawmakers would opt to wait a few months to allow the new laws passed this spring to take hold. If the lawsuits continue climbing, then more must be done in the 2023 legislative session.
Lawmakers should be readying proposals now, we fear. Lawyers and contractors have found a way to make money and it won't be easy for the Legislature to plug the leak of cash being drained from insurance carriers.