A trade association has filed a lawsuit against Florida’s insurance commissioner and two insurers, alleging that recently approved policy language changes designed to reduce litigated property insurance claims violate state law and the Florida Constitution.
The Restoration Association of Florida (RAF) filed the lawsuit in the Second Judicial Circuit last month in Leon County. The complaint accuses Commissioner David Altmaier of illegally approving policy changes for American Integrity Insurance Co. and Heritage Property & Casualty Insurance Co. These changes allow policyholders to give up their right to use the court system to resolve disputes in return for reduced rates, according to the lawsuit.
“American Integrity and Heritage unlawfully stripped away Florida homeowners’ and their assignees’ lawful rights and remedies regarding property insurance claims and used the Florida Office of Insurance Regulation (FOIR) to unconstitutionally approve ill-conceived changes to their policies,” the lawsuit states.
The policy changes call on policyholders to give up their rights to trial by jury to resolve claims, in violation of the Florida Constitution, according to the complaint filed on May 16.
“Among the new terms, the policies proposed a reduction in premiums in return for an agreement to utilize mediation and, if unsuccessful, arbitration” as the sole process to resolve property insurance claims, the lawsuit says.
In addition, policyholders’ assignment-of-benefits rights cannot usually be stripped down by an insurance company via policy language, according to the complaint.
“The text approved by FOIR will confuse policyholders or assignees and subject them to mediation and confidential binding arbitration when they have a right, by law, to go to court,” the lawsuit says.
The insurance commissioner’s actions constrain repair contractors’ ability to earn a living and resolve disputes in court, according to RAF. And the changes in policy language unfairly prohibit the filing of lawsuits to affirm the rights of homeowners and third parties they have assigned their policyholders’ rights to.
“The changes also require a homeowner to obtain prior approval before hiring a contractor to perform work, a condition that allegedly violates Florida’s Homeowner Claims Bill of Rights and existing Florida law,” an RAF statement emailed to the Florida Record states.
FOIR declined to comment on the pending litigation.