TALLAHASSEE – A Florida Senate panel gave a thumbs-up Tuesday to a bill that would prevent property insurers from including attorney fees and other legal costs in their rate base, despite opposition from insurance firms and other business interests.

Insurers and business leaders complained before the Banking and Insurance Committee that SB 1168, authored by Sen. Greg Steube (R-Sarasota), would not do enough to reform the state’s controversial assignment-of-benefits practice. The AOB process allows policyholders to sign away their legal rights to third-party vendors, who often promise quick repairs to water-damaged homes.

But critics say property insurance rates have shot up in recent years because the vendors charge exorbitant rates, which insurers fight in court. If they lose, however, the insurers are on the hook for plaintiffs’ attorney’s fees due to the AOB process.

Steube emphasized on Tuesday, however, that his bill would invalidate AOB agreements unless specific conditions are met and includes the right of insurers to inspect properties in a timely manner.

An amendment authored by Sen. Doug Broxson (R-Gulf Breeze) would have more directly dealt with the AOB issue.

“It goes to the heart of the problem,” Broxson said of his amendment, “and that is litigation.”

Florida has too much litigation, and costs continue to go up, the senator said at Tuesday’s hearing. Courts have “overstretched” on the AOB issue, Broxson said, and it’s time that legislators designate the state’s one-way attorney fee provision for the named insured only – and not for third parties.

Business leaders testifying at the hearing supported Broxson’s amendment, though it ultimately went down to defeat. 

Christine Ashburn, who oversees legislative affairs for Citizens Property Insurance Corp., said the company saw Broxson’s approach as a way to get at the root of the problem and hold down insurance rates.

“This would go a long way to settle the AOB crisis,” Ashburn said.

The amendment directly addresses the attorney-fee issue and Florida’s increasing insurance rates while still protecting consumers, said Carolyn Johnson, director of business, economic development and innovation policy for the Florida Chamber of Commerce.

But Jason Mulholland, speaking for the Florida Justice Association, said the Broxson amendment would go too far in restricting AOB rights.

“Other provisions build in delay and lock the courthouse doors to assignees,” said Mulholland, who urged senators to oppose the amendment and praised the Steube bill as fair to insurers, contractors and policyholders.

Others, however, characterized the AOB problem in Florida as largely the product of a small minority of law firms.

A study done for the Florida Justice Reform Institute found that 15 years ago, fewer than 8,000 AOB lawsuits were filed, according to Ashley Kalifeh, representing the Associated Industries of Florida. That number soared in 2017 to 130,000, more than half of all lawsuits filed against insurers, Kalfeh said.

Others at the hearing seemed more inclined to keep the debate going over the provisions of the Steube bill rather than seeing it die in committee. Sen. Rob Bradley (R-Fleming Island) said he would vote for the bill as a work in process, but Bradley would have opposed it if it were presented in its current form on the Senate floor.

“We’re trying to find solutions that are somewhere in between the bill before us for a vote and the amendment by Sen. Braxson,” Bradley said.

Braxson, however, sees Steube’s bill as having little effect on the state’s AOB problems.

“It appears to me that we’re kind of rearranging the chairs on the deck of the Titanic,” he said, rather than addressing the hole in the middle of the boat.




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