Additional reforms to help Florida’s beleaguered property insurance industry passed the state Senate Thursday as industry officials expressed hope that the reforms would curb questionable roof claims and rein in what they see as abusive litigation.
Senate Bill 1728, authored by Sen. Jim Boyd (R-Brandenton), passed the upper house by a vote of 28-11. It follows the passage of other property insurance reforms last year that have yet to produce a significant reduction in litigated property insurance claims.
“I think that there's a realization among legislative leaders that the situation here for Florida’s insurance market is pretty dire,” Kyle Ulrich, president of the Florida Association of Insurance Agents (FAIA), told the Florida Record. “... A lot of members of the legislature know that there are more companies in financial distress and that there probably needs to be additional reforms passed this year."
The bill would allow insurers to apply a roof deductible for residential property losses while putting restrictions on contractor solicitations to homeowners related to roof claims, according to an analysis of SB 1728 by legislative staff members. The deductible cannot surpass 2% of the insurance policy’s coverage limit.
The measure allows contractors to contact consumers to encourage them to make claims for roof damage, but the communication must include notice that the homeowner is responsible for paying the deductible. In addition, consumers need to be told that filing false or misleading insurance claims can be punished as a third-degree felony, the bill’s provisions say.
“Property rates are rising by double digits, insurers are withdrawing from parts of the Florida market, and Citizens Property Insurance Corp. continues to grow at a dramatic pace,” Michael Carlson, president and CEO of the Personal Insurance Federation of Florida, said in a prepared statement. “These are troubling times for consumers, who have fewer options for insurance and are paying more.”
Loopholes in the current law need to be closed to reduce insurer litigation costs and keep “swindlers” from gaming the system, Carlson said.
The reform measure also will better ensure that a notice of intent to litigate must be filed by the claimant to give insurers an opportunity to work out a solution without going to court, according to Ulrich.
“I think it's certainly a step in the right direction,” he said.