Property insurance rates are skyrocketing across Florida. There is no doubt a crisis in rising rates, but our legislature has blamed litigation for it. Governor Ron DeSantis passed Senate Bill 2A on December 16, 2022, which eliminated the right to attorney fees in residential and commercial property damage lawsuits. Now homeowners have to pay their own attorney fees. The big bad insurance companies ironically cried wolf, and it left policyholders stranded.
On March 24, 2023, DeSantis signed House Bill 837, which included a number of insurance-friendly changes, and eliminated attorney fees in other first-party insurance coverage lawsuits. It repealed Florida Stat. § 627.428, which had long-standing precedence as the proverbial slingshot against Goliath – the little insured versus the gigantic insurance company. The insurance companies now have even more power.
It’s important to note the plethora of property insurance companies that have declared insolvency over the years in Florida. In 2022 alone, six companies declared insolvency and were placed into receivership. Recently in February, United Property & Casualty Insurance Company declared insolvency and was yet another blow to the insurance market. Insurance executives have consistently received huge million-dollar payouts. The executives are paid nicely while the bankrupt company abandons the insureds, and as a result of insolvency, the state then imposes a levy on every other active policy. Insolvency reports are also created which detail why the company failed, similar to reports after a plane crash. Insolvency reports should have been reviewed by our legislators, but weren’t. These recent bills were simply a bailout for the insurance industry.
Many legislators didn’t care to review the insolvency reports or didn’t even know about them. For the insolvency reports that have been released from 2008 through 2018, litigation was not a reason for the company’s downfall. The other, more recent insolvencies have yet to release reports. DeSantis, who has been paid millions by the insurance industry, routinely cited this statistic: that Florida accounts for 79 percent of the nation’s homeowners’ insurance lawsuits, but just 9 percent of the claims. However, that statistic is from David Altmaier, the politically-appointed Florida Insurance Commissioner. Further, the statistic relied on proprietary data from the National Association of Insurance Commissioners, of which he is also president. The advocacy group Florida Consumer Action Network obtained this data and found it was “incomplete, without context, and misleading”, and “can be tied to a small number of insurers and is not an industry-wide problem demanding wholesale changes to the civil justice system”. Further, the data showed Florida insurers take longer to close claims, and close more claims without ever paying, when compared to other states.
As rates continue to increase, and with mounting pressure, DeSantis is now pointing the finger elsewhere. Recently in a press conference in March, DeSantis offered less than conclusive answers and blamed market conditions that pre-existed his time in office.
The Florida Democratic Party chair, Nikki Fried issued a statement voicing her similar concerns: “Because Ron DeSantis and Florida Republicans chose to use two legislative sessions to line the pockets of insurance companies, instead of helping homeowners, Floridians are getting ripped off by property insurance companies who are slashing their payouts and even refusing to cover Hurricane Ian damages altogether,”
Hannah Diaz, Esq.
