Triple-I Weblog | Florida Insurance coverage Disaster Reforms Acquire Momentum With Newest Proposal

Florida Gov. Ron DeSantis’s proposed insurance coverage fraud and authorized system abuse reforms, announced this week for consideration through the legislative session that begins in March, would construct on measures authorised within the closing weeks of 2022 and go a good distance towards fixing the state’s insurance coverage disaster.

Laws handed through the 2022 particular session eradicated one-way legal professional charges and task of advantages (AOB) preparations for property insurance coverage claims. Gov. DeSantis’s proposal would go additional, eliminating these mechanisms and “legal professional price multipliers” for all traces of insurance coverage.

“For many years, Florida has been thought-about a judicial hellhole as a consequence of extreme litigation and a authorized system that benefitted the attorneys greater than people who find themselves injured,” DeSantis mentioned in his announcement. “We at the moment are engaged on authorized reform that’s extra in step with the remainder of the nation and that may convey extra companies and jobs to Florida.”

Earlier than the 2022 reforms, state regulation required insurers to pay the charges of house owners insurance coverage policyholders who efficiently sued over claims, whereas shielding policyholders from paying insurers’ legal professional charges when the policyholders lose. The laws additionally eradicated AOBs – agreements during which property house owners signal over their claims to contractors, who then work with insurers.

AOBs are a regular observe in insurance coverage, however in Florida this consumer-friendly comfort has lengthy served as a magnet for fraud. The state’s authorized setting – together with a few of the most beneficiant attorney-fee mechanisms within the nation – has inspired distributors and their attorneys to solicit unwarranted AOBs from tens of hundreds of Floridians, conduct pointless or unnecessarily costly work, then sue insurers that deny or dispute the claims.

Consequently, Florida accounts for almost 80 p.c of the nation’s householders’ insurance coverage lawsuits, however solely 9 p.c of claims, in keeping with the state’s Workplace of Insurance coverage Regulation.

Eliminating these two mechanisms for property claims addresses a lot of the insurance coverage fraud within the state. Eliminating them for all traces can be a promising signal that the state is actually dedicated to addressing the foundation causes of the disaster.

Florida’s insurance coverage disaster didn’t occur in a single day, and it’ll take years for the impacts of fraud and authorized system abuse to be wrung out of the system.  Policyholders received’t see premium advantages any time quickly. Job 1 is to “cease the bleeding” as insurers fail, go away the state, or cease writing vital private traces coverages like auto and householders.

Triple-I has printed a brand new Points Temporary in regards to the disaster and the state’s efforts to restore it.

Study Extra:

Florida Auto Laws, on Heels of 2022 Reforms, Suggests State Is Critical About Insurance coverage Disaster Repair

Florida and Authorized System Abuse Highlighted at JIF 2022

Fraud, Litigation Push Florida Insurance coverage Market to Brink of Collapse

Florida Dropped From 2020 “Judicial Hellholes” Checklist

Florida’s AOB Disaster: A Social-Inflation Microcosm