Fixing Florida’s insurance woes: Here’s what legislators’ session will tackle next week [South Florida Sun-Sentinel]

A list of potential fixes await Florida lawmakers next week during yet another special legislative session aimed at stabilizing the state’s insurance market.

Senate President Kathleen Passidomo, R-Naples, and House Speaker Paul Renner, R-Palm Coast, released a formal session proclamation Tuesday scheduling the special session from Monday to Dec. 16.

While bills have not yet been filed, the proclamation lists seven insurance-related topics for consideration and three others that would provide relief to consumers and victims of hurricanes Ian and Nicole.

According to the proclamation, the Legislature will consider reforms that would:

Two other goals not directly related to the insurance industry would provide tax relief and other financial help to victims of hurricanes Ian and Nicole, provide additional ways to support disaster response, recovery and relief efforts by the state Division of Emergency Management, and establish a statewide toll credit program for frequent Florida consumers.

Even before specific legislation has been filed, representatives of the two major interest groups — insurers and trial lawyers — that would be affected by reforms have begun making their cases to the public.

At the Florida Chamber’s annual Insurance Summit in Orlando on Tuesday, insurance industry insiders called for legislation they hope would end or sharply curtail practices they say have led to spiraling costs, high homeowner premiums, and the nation’s highest rate of claims litigation.

Currently Florida is responsible for 7% of the nation’s insurance claims and 76% of property insurance lawsuits, according to data compiled by the National Association of Insurance Commissioners.

One incentive insurers want eliminated is the so-called “one-way attorney fee” law.

Insurers say the law encourages litigation by awarding legal fees when claims disputes are settled for any amount, even $1, over insurers’ original offers.

The “one-way” moniker stems from the fact that homeowners named in suits against insurance companies aren’t required to pay insurers’ legal fees if their lawsuits do not succeed. That encourages attorneys to try to overwhelm insurers by filing multiple lawsuits, even over the same claim, in the expectation that they will settle instead of incurring costs of prolonged litigation, insurers say.

David Altmaier, Florida’s insurance commissioner, said he expected the Legislature to repeal the state’s “one-way attorney fee” law next week.

“Now is as good an opportunity we’ve ever had to do this,” he said during a panel discussion at the summit. He later added, “It looks like we’re probably going to be there this session.”

Insurers are also hopeful that the Legislature will agree to further restrict the ability of policyholders to sign over benefits of their insurance claims to third-party repair contractors.

Contractors use assignments of benefits (AOBs) to stand in homeowners’ shoes and sue insurance companies in policyholders’ names, insurers say. Armed with AOBs for roof damage and non-weather-related water claims, contractors submit inflated invoices and sue when insurers underpay or refuse to pay them, insurers say.

AOB reforms enacted in recent years have curtailed but not stopped abuses, insurers said.

Christine Ashburn, chief of communications, legislative and external affairs for Citizens, said that although a previous reform reduced availability of attorneys’ fees in lawsuits involving AOBs, “we’re still seeing three to four AOBs per claim.”

At resource centers set up to connect homeowners with their insurers, contractors were handing out business cards to crying residents “who hadn’t even been back to their homes,” she said.

Ashburn said the solicitations “proved our point” and added, “We just think AOBs need to go away. Just forget them.”

Plaintiffs’ attorneys, however, say their services would not be needed if insurers paid claims in full and on a timely basis.

A YouTube video uploaded by attorney Steven Bush and shared widely by plaintiffs’ attorneys on Monday accused unnamed insurance companies of fraudulently changing damage estimates prepared by insurance adjusters after Hurricane Ian.

Three adjusters interviewed in the video said insurers reduced the scope of damages on the estimates without their knowledge or consent, yet left the adjusters’ names on the estimates.

In one example, an adjuster said his full-roof replacement estimate was altered by an insurer to make it appear that he recommended replacement of only 498 tiles.

Commenting by email about the upcoming special session, Maitland-based attorney Imran Malik said, “The current narrative seeks to portray lawyers as the problem when in reality we are only hired because an insurance company is not paying what they are contractually obligated to do.”

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].

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