Let's get meaningful property insurance reform this time

"Florida had 116,000 property insurance claim lawsuits in 2021 and is on pace for 130,000 in 2022, even before Ian. In other states you might see only a few hundred. California, which is much larger, had 3,500 in 2021." (Mark Friedlander, Insurance Information Institute)

Florida accounts for 9% of the nation's property insurance claims and 79% of the nation's property claims-related lawsuits (Office of Insurance Regulation)

Florida homeowners are paying an average premium of $4,231 for insurance, compared to the U.S. average of $1,544. (Insurance Information Institute)

This week, the legislature is holding its second special session this year alone to deal with Florida's broken property insurance market. It can't come quickly enough.

The legislature has offered solutions in the past to try to fix this issue and have fallen woefully short. Here's what they need to do to fix the crisis and help bring rates back down, which boils down to borderline fraudulent roof claims & replacement schemes, and litigation abuse:

Repeal the one-way attorney fee statute: If a customer sues their insurance company and is awarded $1 more than their last pretrial offer, the homeowner will be compensated for all attorney fees at the insurance company's expense. If the customer does not prevail, neither they nor their attorney has to compensate the insurance company for their attorney fees. With virtually no skin in the game, attorneys are free to file lawsuits at will. This might explain why Florida accounts for 9% of property insurance claims in the nation but an incredible 79% of the country's property insurance claims litigation.

Address the fallout caused by the 2016 Sebo ruling: The Florida Supreme Court found that when two or more perils converge to cause a loss, and at least one of the perils is covered by the policy, the insurance carrier is required to cover all the damage. Unscrupulous contractors use this ruling to combine a couple wind-damaged shingles with wear and tear on an older roof to get a "free" total roof replacement for their customers.

Allow insurance companies to offer a roof value schedule in their home insurance policy: just as a car or tires depreciate due to wear and tear, so does a home's roof. Not allowing home insurance companies to take the age of a home's roof into consideration when settling claims invites frivolous or even fraudulent roof claims, especially for those willing to trade their integrity for a free roof.

Florida's legislature has never been in better position to pass meaningful reform to stop the eight years of insurance abuse, and ultimately help lower rates for consumers.

"The challenge becomes, will the Legislature put the solutions ahead of the monetary support from the trial lobby? This new class of (legislative) leadership, encouragingly, seems primed to support the governor and the solutions." (Tom Gaitens, executive director of the Florida chapter of Citizens Against Lawsuit Abuse).

Please contact your legislator and ask them to support reform which includes all of these solutions at this week's special legislative session so Floridians can get real insurance rate relief.

Allen McGinniss is a Tallahassee native, Principal at the McGinniss Himmel Insurance Agency, and insurance agent since 2005 with focus on home, auto, & life insurance.

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Allen McGinniss