Article Courtesy of The Sun Sentinel
January 28, 2019
It’s time to prevent a handful of South Florida
plaintiff’s attorneys from driving up home insurance premiums for
everyone in Florida, three of Florida’s most powerful insurance
officials told members of a key Senate committee Tuesday.
Chief Financial Officer Jimmy Patronis,
Insurance Commissioner David Altmaier and Barry Gilway,
president and CEO of state-run Citizens Property Insurance
Corp. appeared at a meeting of the Senate Banking and
Insurance Committee to urge enactment this spring of reforms
aimed at quelling costly claims and lawsuits.
For six straight years, efforts to reach compromise on the
issue have ended in stalemate between legislators loyal to
insurers and trial attorneys.
But this year, insurers are more confident. Doug Broxson, a
Republican representing the westernmost district of the
Florida Panhandle, has taken over as committee chairman and
filed a bill that takes direct aim at plaintiff’s attorneys’
source of income. Broxson succeeds Anitere Flores and Miguel
Diaz de la Portilla, both of Miami, who refused to bring
bills favored by the insurers up for votes during their
stints chairing the committee.
Broxson announced early in Tuesday’s meeting that he planned
to grind away until a resolution is reached.
"We’re going to deal with this issue this
session if we have to spend every meeting of this committee
[on it],” he said
A public insurance adjuster inspects damage in this
file photo. The state Senate is considering a bill that could quell
ever-increasing insurance premiums by barring plaintiff's attorneys
from collecting "one-way" legal fees unless representing named
Failure to act will keep the number of lawsuits — and resulting
insurance premiums — rising ever higher, said the three officials
The number of lawsuits involving residential properties against all
insurers in Florida increased from 27,416 in 2013 to 82,663 in 2018,
according to data presented by Gilway. And because litigation adds about
$25,000 to the cost of resolving a claim, Gilway estimated the
additional 55,247 suits in 2018 cost all home insurance customers an
extra $1.38 billion in the form of higher premiums.
Until recently, South Florida homeowners have borne the brunt of those
increases because most litigation involves properties here. But lawsuits
are increasing throughout the state and more than 90 percent of Citizens
customers statewide are facing rate increases next year, Gilway said.
Insurers say a small group of plaintiff’s attorneys are driving up costs
by exploiting a state law originally created to help consumers. The law
reimburses legal fees for insurance customers that sue over a claims
dispute and their insurer loses or agrees to pay any amount over the
original offer, the insurance officials told the committee. Meanwhile,
customers aren’t at risk of paying their insurers’ legal costs if their
suits don’t succeed.
The plaintiff’s attorneys discovered they could use these protections to
create large numbers of lawsuits — and a deep reservoir of legal fees,
insurers contend. More than a decade ago, a single attorney began
teaching repair contractors, usually roofers or water restoration
contractors, how to convince homeowners to sign over their right to seek
payment from insurers on an affidavit known as an “assignment of
After securing assignments, contractors bill their insurers and their
attorneys file suit if the insurer denies or refuses to pay the full
Plaintiff’s attorneys contend they wouldn’t have to file so many suits
if insurers didn’t deny or underpay so many claims.
Broxson’s bill would prevent the right to collect attorney fees under an
insurance policy unless representing a named insured or named
beneficiary and not when representing anyone “assigned or extended by
agreement.” Broxson said Tuesday that he expects to amend the bill so it
pertains only to property insurance and the auto glass portion of auto
Lee Jacobson, an Orlando-based attorney who spoke on Tuesday on behalf
of the Florida Justice Association, a plaintiff’s attorneys’ trade
group, later said enactment of Broxson’s bill will force homeowners to
sue insurers if their insurer won’t pay. Contractors will be forced to
file liens against homeowners to guarantee payment, he said.
Asked about the bill, Paul Handerhan, senior vice president of the Fort
Lauderdale-based Florida Association for Insurance Reform, said he
doesn’t foresee “any scenario” in which Broxson’s bill does not advance
out of the committee. From there, it would go to the Judiciary and Rules
committees before proceeding to the full Senate, and then merged with
legislation from the House of Representatives, which approved its own
bill in 2017 restricting attorneys fees.