Florida residents opened more than three-fourths of all the homeowner insurance lawsuits filed in the U.S. in 2019, new data from the Florida Office of Insurance Regulation (OIR) shows.
Florida Insurance Commissioner David Altmaier provided the data this month in a letter to Florida House Commerce Committee Chairman Blaise Ingoglia. Though Florida accounted for only 8.2 percent of all homeowner claims opened by insurance companies nationwide, the lawsuits Florida residents filed against insurers in 2019 represented 76.5 percent of all such litigation filed in the U.S., Altmaier said.
“OIR does not have a readily available explanation for Florida’s outlier status other than to simply state that Florida is experiencing far more claims-related litigation than the 47 other reporting states,” he said.
The data, which is based on the National Association of Insurance Commissioners’ Market Conduct Annual Statement (MCAS), also shows that the number of Florida insurance claims closed without payment is in line with the national average.
“The recent OIR report on the MCAS data shows just how bad the litigation environment is in Florida,” Michael Carlson, president and CEO of the Personal Insurance Federation of Florida (PIFF), told the Florida Record. “It’s not bad – it’s a disgrace.”
The state needs robust reforms to reduce incentives to file such civil lawsuits, according to Carlson. A bill that passed the state Senate this month on a vote of 27-13, SB 76, would go a long way to doing just that, he said.
“Senate Bill 76 includes real reforms that will reduce property insurance litigation and take pressure off consumers who have to foot the bill for trial lawyers through higher insurance rates,” Carlson said.
SB 76 would end most uses of contingency fee multipliers in the awarding of attorney fees in insurance litigation, relying instead on a “lodestar” system focusing on reasonable hourly attorney fees for a reasonable number of hours worked. It would also allow for a sliding scale of compensation for roof replacement based on the age and type of roof subject to an insurance claim.
In addition, the bill would reduce the time period for a policyholder to file a property insurance claim or supplemental claim by one-third.
Similar reforms were suggested by Altmaier in his April 2 letter to Ingoglia.
“These solutions could substantially reduce the litigation associated with claims, bringing more certainty into Florida’s property insurance market,” the insurance commissioner said. “Ultimately, this will provide more stability in the market and more rate stability for consumers.”