A Look Inside Florida’s Current Property Insurance coverage Reform | Cozen O’Connor

Two years after implementing significant task of advantages reform, Florida enacted broader property insurance coverage declare reform. On June 11, 2021, Governor DeSantis signal S.B. 76, which takes impact on July 1, 2021. S.B. 76 focuses on decreasing insurance coverage declare litigation by, amongst different issues, requiring well timed discover of claims, curbing sure solicitation practices utilized by roofing contractors, and limiting the circumstances during which lawyer’s charges may be awarded to policyholders in property insurance coverage lawsuits.

Deadlines for Discover of Claims

S.B. 76 expanded Florida Statutes Part 627.70132, which beforehand set discover deadlines for windstorm claims. The amended Part 627.70132 is relevant to each admitted insurers and surplus strains insurers and applies to claims arising from any peril. The amended statute states:

(2) A declare or reopened declare, however not a supplemental declare, underneath an insurance coverage coverage that gives property insurance coverage, as outlined in s. 624.604, together with a property insurance coverage coverage issued by an eligible surplus strains insurer, for loss or injury brought on by any peril is barred except discover of the declare was given to the insurer in accordance with the phrases of the coverage inside 2 years after the date of loss. A supplemental declare is barred except discover of the supplemental declare was given to the insurer in accordance with the phrases of the coverage inside 3 years after the date of loss.

The statutes defines “reopened declare” as “a declare that an insurer has beforehand closed, however that has been reopened upon an insured’s request for added prices for loss or injury beforehand disclosed to the insurer.” The time period “supplemental declare” is outlined as “a declare for added loss or injury from the identical peril which the insurer has beforehand adjusted or for which prices have been incurred whereas finishing repairs or substitute pursuant to an open declare for which well timed discover was beforehand supplied to the insurer.”

Accordingly, underneath this amended statute, whether or not a declare is open will have an effect on the period of time the policyholder has to submit a request for added prices. For claims which can be open, and thus proceed to be adjusted, the insured should submit the supplemental declare inside three years. For closed claims, the insured is required to provide discover inside two years. For hurricanes, tornadoes, windstorms, extreme rain, or different weather-related occasions, the date of loss is the date that the hurricane made landfall or the weather-related occasion is verified by the NOAA. Part 627.70132 doesn’t have an effect on the statute of limitations.

Discover of Intent to Provoke Litigation

Essentially the most vital a part of S.B. 76 is the creation of Florida Statutes Part 627.70152, a complete statute pertaining to property insurance coverage litigation. Excluding these fits introduced by assignees, insureds are actually required to submit a discover of intent to the Florida Division of Monetary Companies a minimum of 10 days earlier than submitting swimsuit, however could not accomplish that till the insurer has made a protection willpower as required by Part 627.70131. The discover should specify the alleged acts or omissions giving rise to the swimsuit and, if for causes apart from a denial of protection, should embrace an itemized pre-suit settlement demand.

Insurers should reply in writing inside 10 enterprise days after receiving a pre-suit discover. If responding to a discover concerning a denial of protection, the insurer could reply by accepting protection, persevering with to disclaim protection, or asserting the precise to re-inspect the property. If the insurer is responding to a discover alleging an act or omission apart from a protection denial, the insurer should reply by making a settlement supply, invoking appraisal, or requiring the insured to take part in one other type of alternate dispute decision.

If an insured recordsdata swimsuit with out giving its discover of intent, or if the insured recordsdata swimsuit earlier than the insurer has a chance to reply, the swimsuit have to be dismissed with out prejudice.

Claims for Lawyer’s Charges

Claims for lawyer’s charges in lawsuits introduced underneath property insurance coverage insurance policies will likely be ruled by Part 627.70152. Within the discover of intent, policyholders are required to make a pre-suit settlement demand. In response, insurers are required to make a pre-suit settlement supply. The distinction between the pre-suit demand and pre-suit settlement supply is the “disputed quantity.” The quantity of “affordable lawyer’s charges” will likely be calculated as follows:

  1. If the distinction between the quantity obtained by the claimant and the pre-suit settlement supply, excluding affordable lawyer charges and prices, is lower than 20 p.c of the disputed quantity, every get together pay its personal lawyer charges and prices and a claimant might not be awarded lawyer charges underneath s. 626.9373(1) or s. 627.428(1).
  2. If the distinction between the quantity obtained by the claimant and the pre-suit settlement supply, excluding affordable lawyer charges and prices, is a minimum of 20 p.c however lower than 50 p.c of the disputed quantity, the insurer pays the claimant’s lawyer charges and prices underneath s. 626.9373(1) or s. 627.428(1) equal to the share of the disputed quantity obtained occasions the overall lawyer charges and prices.
  3. If the distinction between the quantity obtained by the claimant and the pre-suit settlement supply, excluding affordable lawyer charges and prices is a minimum of 50 p.c of the disputed quantity, the insurer pays the claimant’s full lawyer charges and prices underneath s. 626.9373(1) or s. 627.428(1).

The “disputed quantity” is the vital aspect for figuring out whether or not and to what extent a policyholder could also be entitled to an award of lawyer’s charges. The reasonableness of a price award is set by taking a look at: (1) the distinction between the quantity obtained and the insurer’s pre-suit supply, and (2) evaluating the distinction to the “disputed quantity.” Subsequently, this statute encourages each policyholders and insurers to pretty consider and try to resolve claims with out litigation.

Regulation of Contractors and Public Adjusters

Florida Statutes Chapter 489 regulates contractors. S.B. 76 creates Fla. Stat. Part 489.147, which prohibits contractors from soliciting residential property homeowners via a prohibited commercial, providing residential property homeowners monetary incentives for permitting the contractor to conduct and inspection or submit an insurance coverage declare for roof injury, and advising policyholders about protection. Prohibited commercials are any commercial that encourages a shopper to contact a contractor or public adjuster for the aim of constructing an insurance coverage declare for roof injury. Contractors and unlicensed individuals discovered to be in violation of Part 489.147 could also be fined as much as $10,000 per violation.

S.B. 76 additionally a number of subsections of Florida Statutes Part 626.854, which regulates public adjusters. The revised statute additional prohibits contractors from adjusting or soliciting insurance coverage claims, besides {that a} contractor could counsel {that a} shopper think about contacting his or her insurer to find out if a proposed restore is roofed. Moreover, revised Part 626.854 prohibits public adjusters from providing monetary incentives to residential property homeowners for permitting the adjuster to examine the property proprietor’s roof or making a declare for injury to the property proprietor’s roof.

Statutory Provides of Judgment

There was some query amongst these following S.B. 76 concerning whether or not the invoice prohibits statutory affords of judgments. Florida Statutes Part 768.79 encourages settlement of claims by offering an lawyer price shifting mechanism in situations the place the defendant makes a suggestion of judgment to the plaintiff, and the final word judgment is considered one of no legal responsibility or the plaintiff obtains a judgment that’s a minimum of 25% lower than the quantity of the supply. Part 768.79 has a corresponding provision for plaintiffs that make affordable proposals for settlement.  

S.B. 76 amends Florida Statutes Sections 626.9373 and 627.428, the statutes that present lawyer price shifting for policyholders, to state, partly: “In a swimsuit arising underneath a residential or business property insurance coverage coverage not introduced by an assignee, the quantity of affordable lawyer charges shall be awarded solely as supplied in s. 57.105 or s. 627.70152, as relevant.” Beneath a strict studying of this language out of context, it could appear that Part 768.79 is not related in property insurance coverage litigation. Nonetheless, that interpretation might not be correct contemplating the context. This language was added to the top of a paragraph creating one-way lawyer price shifting for prevailing policyholders. In context, this new language seems solely to be narrowing the definition of “affordable sum as charges” within the current one-way attorney-fee shifting mechanism.

Contemplating that Part 768.79 applies “[i]n any civil motion for damages,” it appears fairly doubtless that courts will proceed to implement statutory affords of judgment made by defendants in property insurance coverage litigation. 

Consolidation of Associated Lawsuits

Part 627.70153 requires events to provide written discover to the courtroom if they’re conscious of ongoing  a number of lawsuits involving protection for a similar residential property coverage underneath the identical insurance coverage coverage with the identical proprietor. The courtroom then could order the circumstances be transferred or consolidated.

Closing Ideas

S.B. 76 ought to have a optimistic affect on the insurance coverage declare panorama in Florida. The Florida Legislature is encouraging insurers to pay respectable claims, and discouraging unscrupulous contractors and different actors from abusing the insurance coverage declare course of and from clogging the courts with frivolous litigation.

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