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Florida Governor Signs Sweeping Property Insurance Regulation into Law


Florida Governor Signs Sweeping Property Insurance Regulation into Law

Key Takeaways:

  • Senate Bill 2-A signed in September by Florida Gov. Ron DeSantis will result in notable changes to the state’s property insurance industry, including the end of “One-Way” attorney fees for policyholder attorneys.

  • It will also eliminate the assignments of benefits to contractors.

  • And it will accelerate the timelines for insurer response.

On September 16, 2022, Florida Gov. Ron DeSantis signed two new bills into law that will implement sweeping changes to the Florida property insurance industry. One of the bills, Senate Bill 2-A, will result in the following notable changes:

  • The End of “One-Way” Attorney Fees for Policyholder Attorneys. Until recently, attorneys representing policyholders could recover substantial attorney’s fees — (in amounts often eclipsing actual claim value for their clients) — if insurers make a payment of any amount after suit is filed. However, insurers could not recover attorney’s fees if they prevailed in the litigation. While the Florida legislature has passed several laws since 2019 capping the amount of recovery under the fee statute, Senate Bill 2-A eliminates statutory fee recovery altogether and may require policyholder attorneys to enter into contingency agreements (similar to liability claims), or offers of judgment (which would require a case to be tried to verdict).
  • Elimination of Assignments of Benefits to Contractors. Assignments of policy benefits to contractors, the driving force behind property insurance litigation abuse in Florida over the last 15 years, has depleted insurers of their reserves and undermined homeowners’ ability to be made whole from catastrophic damage (where in many cases the assignees took insurance benefits and either did not make the repairs or performed substandard repairs). Senate Bill 2-A will prohibit assignments of claims for new policies issued after January 1, 2023.
  • Accelerated Timelines for Insurer Response. Senate Bill 2-A benefits not only insurers but also homeowners, as it reduces the deadlines for insurers to acknowledge receipt of, investigate, and pay claims, and gives Florida’s Office of Insurance Regulation more authority to vet insurers and evaluate their practices from both an underwriting and claim handling perspective.

Coupled with other related bills signed into law since 2019, Senate Bill 2-A seeks to halt the concerning trend of Florida-based insurers going into insolvency and nationally-based insurers limiting the number of policies written in Florida, as well as reducing the significant volume of business assumed by Citizens Property Insurance Corporation, Florida’s state-owned homeowner insurer of last resort.

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