Property Insurance Crisis

On Monday December 12, 2022, the State of Florida began a special session of the Legislature to address the property insurance crisis. Homeowners in Florida have seen skyrocketing insurance rates recently, and many insurers in the State have been unable to survive financially, and have gone into receivership. This crisis is largely due to the explosion of property insurance lawsuits, which began about a decade ago, and the numbers have been increasing year to year. In 2014 there were approximately 20,000 property suits filed and in 2021 there were around $82,000 filed. It was noted at the hearing 76% of the property lawsuits filed in 2021 in the U.S. were filed in Florida.

Advocates from both sides of the issue presented arguments as to why the one way fee statute Fl. Stat. 627.428 should or should continue. Advocates of the Statute seemed to argue that policyholders will have no way to fight their insurance company without the fees statute. On the other hand, advocates for reform cited the excessive lawsuits, rising insurance rates, and the collapse of the property insurance industry as a whole – six insurers have gone insolvent this year in Florida while others are leaving. Clearly, the data shows that the current trajectory is unsustainable.
Other key topics of SB 2-A include a total ban on assignment of benefits on property policies, joint contingent offer of judgments, reduction in the time for notice of new claims, mandatory binding arbitration, and requiring a finding of breach of contract to file a bad faith action.

As of today’s date, SB 2 – A has passed both the House and the Senate and is with Governor DeSantis for signing. Many Florida homeowners hope to see some relief regarding home insurance rates as a result of this Bill. The signing of this Bill will be a victory and a step in the direction of recovery for the property insurance industry, and will likely lead to a marked reduction in the amount of litigation.

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