Scant Evidence Suggests Lawsuits Drive Florida’s Insurance Crisis

A recent article by the Miami Herald entitled "Did lawsuits drive Florida's insurance crisis? The evidence remains thin" highlights the challenges faced by Florida residents in dealing with rising insurance premiums.

Despite efforts by the state government to curb lawsuits and claims that litigation is the cause of premium increases, there is little evidence to support this, according to the Miami Herald. Premiums continue to rise, and thirteen insurance companies have gone out of business, though not directly due to litigation.

Lawmakers express frustration over the lack of concrete data on how lawsuits impact premium costs, with one senator comparing the availability of information to the recent disclosures on UFOs. Florida does have a high number of lawsuits against insurers, and while some may be abusive, there is a lack of study on the proportion of excessive or frivolous lawsuits compared to legitimate grievances. Insurers in Florida may contribute to the high litigation rate by attempting to minimize payouts, with allegations of manipulation to deny or undervalue claims.

The Herald article goes on to discuss the longstanding attribution of Florida's insurance crisis to lawsuits by insurance companies, state regulators, and many lawmakers.

"It's unfortunate that the Florida Legislature did not have the foresight to see past the insurance company's ruse," says personal injury attorney David Sampedro, "Lobbyists for the insurance industry convinced legislatures that these draconian anti-consumer laws would lower insurance premiums. Instead, insurance companies raised premiums while laughing all the way to the bank."

Efforts by Governor DeSantis and the Legislature to address the issue have included limiting homeowners' ability to assign insurance benefits to contractors, similar to assigning benefits to healthcare providers. Additionally, a significant legislative change involved discontinuing the longstanding requirement for insurance companies to pay attorney's fees when plaintiffs sue and win, a move seen as historic by insurers and business groups.

"We have seen this before," says veteran lawyer Mitch Panter, "When medical malpractice reforms were enacted the insurance industry promised reduced malpractice premiums for health care providers would follow. That did not happen. Each time consumer rights are stripped in favor of insurance companies' profits it never benefits anyone other than the insurance companies. When will our regulators learn? Or at least try to make sure that premiums are reduced to offset the benefits removed from the insured."

The insurance crisis in Florida, originating in 2017 after a 12-year storm-less period ended, lacks comprehensive studies by the Legislature to identify contributing factors. In 2021, lawmakers mandated state regulators to collect more detailed data on lawsuits from insurers. However, the release of the initial findings has been delayed, partly due to 71% of insurance companies failing to submit required data initially, with an additional 18% missing the deadline.

While insurance companies previously attributed the surge in claims to contractors convincing homeowners of storm-related damages, a 2021 law shortened the claim filing deadline from three years to one year after the incident. However, a survey conducted in 2020 by Florida Insurance Consumer Advocate Tasha Carter suggests that the instances blamed on contractors were likely in the minority, as approximately 80% of claims were filed within two weeks of the loss.

Get the Legal Help You Need

Panter, Panter & Sampedro is a leading personal injury law firm dedicated to protecting Florida's families. For over 30 years, our experienced trial attorneys have worked one-on-one with clients to successfully get the justice, recovery, and compensation they deserve. If you believe you may have a claim against an insurance company, speak to a dedicated attorney today by calling (305) 662-6178.

Mitchell Panter, Esq. is a Board Certified Civil Trial Attorney, Community Advocate and Managing Partner at Panter, Panter & Sampedro, P.A.

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