The Florida Senate has passed property insurance reforms aimed at holding the line on civil litigation costs that have burdened Florida insurers to the point of suffering an estimated $1.7 billion in losses in 2020.
Senate Bill 76, authored by Sen. Jim Boyd (R-Bradenton), passed the Senate on a 27-13 vote on April 7. Boyd’s bill offers provisions to reduce attorney fees in property tax claims and to reduce the cost of roof replacements through a sliding scale based on the age and type of roof.
“His bill goes a very long way to addressing all of the issues that are manifesting themselves here in Florida, both on the litigation side and some of the other cost drivers in the system,” Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents, told the Florida Record. “One of the cost drivers that the industry is being plagued with right now is the explosion of roof claims.”
In turn, insurers can no longer afford to offer full replacement costs for all roofs in base property insurance coverage, according to Ulrich.
“The perception of homeowners has changed,” he said. “They don’t view an insurance policy as a sort of catastrophic policy that is meant to indemnify them. … Instead, it’s viewed much more as a warranty policy.”
Policyholders may think that they can avoid roof replacement costs by simply filing an insurance claim, according to Ulrich, but the cost of such claims have inundated the system, resulting in higher premiums for many policyholders.
SB 76 would also help to end most uses of attorney fee multipliers in property insurance litigation. Instead, the legislation emphasizes “lodestar” calculations, whereby reasonable hourly rates are simply multiplied by the number of hours it would reasonably take for the attorney to complete the work.
Under the bill, the time provided to file a property claim – or reopen a claim – would be reduced from three years to two years.
“I am optimistic that a bill will pass the legislature, whether it is in the form of SB 76 or another thing entirely,” Ulrich said.