by John Haughey
The Center Square
March 26, 2021
A proposed overhaul of Florida’s property insurance laws designed to dissuade litigation and allow insurers to depreciate payouts for roof repairs is headed for the Senate floor.
The Senate Rules Committee Thursday approved Senate Bill 76, filed by Sen. Jim Boyd, R-Bradenton, in a 12-5 vote after setting it aside for further debate on March 18 to hear attorneys’ and consumer advocates’ mounting objections to several provisions in the bill.
Those objections remain and SB 76 faces uncertain prospects on the Senate floor. Its House companion, House Bill 305, sponsored by Rep. Bob Rommel, R-Naples, advanced through its first hearing before the House Insurance & Banking Subcommittee in a 12-2 vote Tuesday. It has two more hearings to reach the chamber floor.
SB 76 would force claimants, attorneys and insurers to seek resolutions without going to court by removing “incentives” for legal action in resolving disputes over claims, especially for roof repairs
Proposed reforms in the bill include slashes in the time a policy-holder has to file a claim from three years to two, reductions in “multiplier fees” for attorneys “that discourage settlements” and a provision that allows insurance companies to offer policies that insure only the depreciated value of roofs more than 10 years old instead of full replacement costs.
Boyd, an insurance agent, said rising costs for homeowners insurance policies are driving the need for reform. His own homeowners insurance costs will go up 40 percent this year, he said.
“We are in a crisis now for our homeowners market,” Boyd said.
Noting the number of roof claims going to court have increased from about 27,000 in 2013 to more than 85,000 in 2020, Boyd said the state’s Office of Insurance Regulation (OIR) projects insurance companies in the state will likely double losses from 2019 to 2020.
Litigation is among factors disrupting the state’s property insurance market.
Florida’s businesses and 6.2 million homeowners are seeing – or will see – double-digit rate increases as high as 45 percent in property insurance premiums as insurers cite ballooning reinsurance costs, “loss creep” from 2017-18 hurricanes and coastal flooding among factors driving costs.
But critics say SB 76 and similar measures, including SB 212, a “contingency risk multiplier” bill filed by Sen. Jeff Brandes, R-St. Petersburg, diminishes policyholders’ ability to seek redress in court and would hurt homeowners with older roofs.
Brandes said the state’s property insurance market is in “crisis” and the Legislature must respond. “If we don’t act, we’re failing our constituents,” he said. “We have to stand our ground here.”
“I just think this legislation goes too far,” said Senate Minority Leader Sen. Gary Farmer, D-Lighthouse Point. “This is a David versus Goliath situation, literally, and we’re taking David’s sling away.”
Democrats and trial attorneys say the insurance industry’s contention that fraudulent roof-damage claims are driving up costs is exaggerated.
If insurers were more responsive, Farmer said, there wouldn’t be litigation.
“Homeowners don’t want to file a lawsuit, period,” he said. “When an insurance company is underpaying or denying claims with such frequency that so many homeowners have to file suit, that, too, is a problem.”
SB 76 establishes a “reimbursement schedule” that allows insurers to sell policies with reduced payments for replacing roofs over 10 years old. For instance, insurers could reimburse 70 percent of the costs for metal roofs over 10 years old and 40 percent for concrete-tile and clay-tile roofs.
The change would shift more costs to homeowners when they have roof damage, Boyd acknowledged, but said they can buy additional coverage and SB 76 still allows judges the discretion to allow higher attorney fees in specific cases.