What you need to know about pending changes to
Florida insurance laws
Article Courtesy of The Sun Sentinel
By Ron Hurtibise
May 14, 2021
No one was thrilled with the insurance changes that
were passed on the final day of the Florida Legislature’s spring session
— not the insurance industry and not consumers’ attorneys.
Insurers didn’t get to kill the law that requires them, and not their
customers, to pay to replace damaged roofs. Failure to change the law
will keep insurance rates rising, they warn.
Attorneys failed to prevent new restrictions on how
they get paid when they sue insurance companies, prompting warnings that
consumers will have to pay attorneys upfront if they want to sue.
Months of debate unfolded over how
lawmakers could help stave off skyrocketing insurance rates
Along the way, plenty of other changes cleared the
Legislature before the session closed Friday that will bring
significant changes to auto insurance, claim filing
deadlines, kickbacks from contractors, rate hikes by
state-run Citizens Property Insurance Corp. and more.
The bills next go to Gov. Ron DeSantis’ desk. Barring a
veto, they will be enacted into law on July 1. Here’s what
consumers need to know about them: No-fault auto insurance
repeal will raise costs for some, lower them for others
Motorists who have been rolling the dice by purchasing the
minimum amount of auto insurance required to register their
vehicles — $10,000 in personal injury protection — will have
to pay more to cover injuries to other motorists. Vehicle
owners must now buy liability coverage that will pay at
least $25,000 per occupant and $50,000 per incident.
The new requirement could raise insurance costs by as much
as 50% for those who buy the minimum no-fault coverage, said
Sen. Jeff Brandes, who voted against the bill. But drivers
who are already paying for liability coverage will likely
see their costs reduced because they will no longer be
required to buy the $10,000 PIP policy, which is considered
redundant for motorists who already have health insurance.
The Florida Legislature passed restrictions that will
make it harder for roofing companies to force insurers to pay for
your new roof.
Motorists will have the option of buying $5,000 or
$10,000 in coverage for injuries to themselves. Supporters say this
option would be useful to drivers who do not otherwise have health
In a statement released Friday, the Personal Insurance Federation of
Florida urged DeSantis to veto the bill, saying cost hikes will result
in more low-income drivers forgoing insurance altogether. About one in
five Florida motorists are uninsured.
Restrictions tightened on roofing contractors,
A hotly debated proposal that would have allowed insurers to switch out
full roof replacement coverage with limited coverage for roofs 10 years
or older did not survive the session. The insurance industry wanted to
replace full-roof replacement coverage — which they claim is driving
millions of dollars in losses — with partial roof coverage that would
require owners of older roofs to pay a large portion of their
Insurers requested the change to combat roofing companies they say
offered incentives to homeowners willing to let them inspect their roofs
for damage they could blame on past hurricanes.
Florida’s building code requires replacement of entire roofs if more
than 25% damaged, and insurers contend that contractors are exploiting
the requirement by blaming normal wear and tear on hurricanes or hail
storms to justify full replacement claims.
The final version of the bill bars contractors from advertising,
offering to perform or performing public adjuster services unless they
are licensed as public adjusters. That means contractors cannot inspect
damage to determine whether it could be covered by insurance, or perform
any function connected to submitting a claim.
Insurers have long complained about roofing contractors that advertise
their ability to help submit roof claims and get new roofs funded with
little or no out-of-pocket costs to consumers.
Public adjusters, who are allowed to inspect damage and submit claims,
will be barred from offering property owners anything of value for
allowing contractors or themselves to inspect a roof for damage or file
an insurance claim for the roof.
Public adjusters are also barred from accepting payment from contractors
or attorneys. This is intended to eliminate the ability of public
adjusters working as “loss consultants” for law firms that specialize in
A separate bill empowers the Department of Financial Services to levy
fines against contractors acting as claims adjusters.
Brandes, a Tampa-area Republican, who supported the roof replacement
proposal, said failure to include it in the Legislature’s major
insurance reform bill will keep rates for private-market coverage
unaffordable and drive more consumers to state-owned Citizens Property
Insurance Corp., which he said is growing at unsustainable rates.
Brandes said that without the roof coverage change desired by insurers,
the bills that cleared the Legislature this year amounted to just “a 40%
solution for what is needed in Florida to potentially bend the cost
Even though the roof replacement provision was stripped from the final
bill, consumers should know that some insurers are seeking authorization
from state insurance regulators to offer “actual cash value” roof
coverage for older homes they would be otherwise unwilling to insure.
Others are selling the reduced roof coverage with dwelling/fire
Either choice would potentially expose homeowners to high out-of-pocket
costs, including their deductable, if their roofs must be replaced.
Deadline for filing claims reduced to two years
Concerns that too many hurricane damage claims are being filed long
after the storms have passed prompted lawmakers to reduce the deadline
for claims from three years to two years. While originally intended to
address only hurricane claims, the final version creates a two-year
deadline from the time of loss for all types of claims while allowing an
additional year to file supplemental claims for damage that occur during
repairs or aren’t apparent when first reported.
Insurers said that too many “questionable” claims tied to Hurricane Irma
were filed in the third year after the storm, while supporters of the
reduction argued that two years is enough time for homeowners to
identify and report storm losses.
Ten months after Irma struck in September 2017, state insurance
regulators reported claims with estimated insured losses totaling $9.7
billion. By June 2020 with the filing deadline approaching in September,
the estimated loss tally had doubled to $17.4 billion. By November 2020,
the number had increased by another $3.3 billion.
Insurers must get 10-day lawsuit notification
Policyholders must give insurers 10 days’ notice before filing suit,
presumably to give insurers time to correct disputed issues.
Early versions of the bill would have given insurers 60 days’ notice,
but opponents said that would have added too much time to already
lengthy delays before repairs commence. Current law already gives
insurers 90 days to determine whether to cover losses, and the bill bars
pre-suit notices until insurers make their coverage decisions.
Rate increase cap lifted for Citizens Property Insurance
The state-owned “insurer of last resort” has become the first choice of
too many homeowners shocked by price increases from their insurers.
Unlike private-market carriers, Citizens can raise rates for its
customers by only up to 10% a year. As a result, Citizens has become an
attractive choice compared to companies that have raised their rates by
as much as 40% in recent months.
And that’s alarmed lawmakers concerned that if Citizens — currently
growing by 5,000 policies a week — gets too big, its $7 billion surplus
would be depleted, leaving all insurance customers in the state
vulnerable to special assessments to make up any shortfall.
A Senate bill sponsored by Brandes would have increased Citizens premium
costs by 15% immediately up to 25% if the company’s policy count
exceeded 1.5 million. But a House companion bill never emerged, and a
milder version survived that raises the maximum annual rate increase
from the current 10% by 1% each year until it reaches 15% by 2026.
Policyholders have 10 days to cancel public
Homeowners dissatisfied with their decision to hire a public adjuster to
represent them when filing their claim with their insurer now have 10
days to cancel their contract with the adjuster. Current law allows
three days. The cancellation notice must be sent by certified mail,
return receipt requested, or other forms of mail that provides proof
that it was delivered.
Original versions of the bill would have required a 60-day pre-suit
notice. But plaintiffs attorneys countered that insurers already have 90
days to decide if a claim is covered. Requiring an additional 60-day
notice before a lawsuit could be filed suit disputing an insurer’s
decision would unfairly delay repairs, they said.
Attorneys fees incentives reduced
Insurers have long complained about the so-called one-way attorney fee
provision in state law that they say encourages lawsuits by allowing
attorneys to bill insurers for all of their fees if they recover as
little as $1 more than the insurer originally offers.
Replacing that provision is one that requires policyholders to pay their
attorney’s fee if the lawsuit recovers less than 20% of the difference
between what the insurer offers and the policyholder demands. If the
suit recovers between 20% and 50% of this difference, the insurer pays
the attorney’s fee multiplied by the percentage difference. Insurers
will pay the full attorney’s fee only if the lawsuit results in a
settlement exceeding 50% of the difference.
Insurers contend the one-way fee has caused litigation to increase
sharply over the past decade, while attorneys counter that lawsuits
would not be necessary if insurers paid claims promptly and fairly.
Sen. Gary Farmer, a Fort Lauderdale-based plaintiffs attorney and
frequent critic of the insurance industry, said the attorney fee
restrictions will leave homeowners unable to get legal help from
attorneys who currently take cases on a contingency basis.
Farmer derided insurers’ complaints that out-of-control litigation is
threatening the financial stability of the industry as a “completely
manufactured crisis.” Insurers hide profits in holding companies and
other affiliated ventures, he said.
“The bill [restricting attorney fees] chips away at the tools to help
the little guy and the little girl take on Goliath,” he said.
Regardless of who’s to blame, there’s little disagreement that rising
legal costs threatens affordability of insurance.
A study by insurance consultant Guy Fraker earlier this year found that
of $15 billion spent on claims in Florida that resulted in lawsuits
since 2015, only 8% went to policyholders to fix damage. Plaintiffs
attorneys got 71% and insurers paid their defense attorneys the other