Floridians need to reach out to tell their elected representatives why the proposed insurance legislation is anti-consumer and not in Floridians’ best interests.
See below the proposed changes and arguments in opposition:
Limits the rights of homeowners:
Limits the ability of homeowners to get statutory attorney fees from their insurance companies, even if the insurance company has been found to have treated a policyholder unfairly by denying, delaying, or underpaying their claim. The law replaces the attorney fee statute that has been in effect for more than a century.
Reverses recent changes that have helped cut down on lawsuits:
The bill gets rid of two parts of the 2019 AOB law that are working: the demand letter and the proposal for settlement. Since the Legislature passed changes to the way lawsuits are handled during the 2019 regular session, the 2021 regular session, and the 2022 special session, there have been a lot less lawsuits. OIR has said in public that the number of lawsuits has gone down by 30%. CFO Patronis also mentioned this at the September Cabinet meeting.
Makes policyholders pay for things they don’t need and that are expensive:
Proposed legislation proposes a written notice of intent demand letter 60 days before you can file a lawsuit. Under Section 627.70131, the Notice of Intent can’t be filed until the insurance company has made a “determination of coverage” (the 90-day prompt pay law). This new process will take more time and cost more money, which will make it easier for insurance companies to delay, deny, or underpay legitimate claims. This means that an insured person has to arguably wait at least 150 days after a loss before they can sue their insurance company.
Sets very short deadlines for when policyholders can file claims:
Policyholders only have one year to file a notice of intent for an initial claim and 18 months to file a notice of a supplemental claim if the initial claim needs to be changed. If these deadlines aren’t met, insurance claims can’t be made, and the policyholders are left to take care of themselves. This makes it harder for policyholders to get their claims paid quickly. On the other hand, the law is making it easier for insurance companies to delay, deny, and underpay claims.
There are no penalties or rules for insurers who don’t pay claims on time:
The bill shortens the amount of time insurance companies have to respond to a claim, but it doesn’t put any enforcement measures in place. This gives insurance companies another way to put off responding to claims without being held responsible. Also, the bill lets insurance companies get out of the time limits if there are things that are beyond their control. What is beyond their control?
Makes it harder to get to court:
Property owners won’t be able to hold an insurance company responsible for how it handles claims, which could hurt a policyholder, unless there has already been a trial court judgment in a separate case. In other words, even if an insurance company broke its contract with a homeowner and acted in bad faith, the policyholder won’t be able to hold the insurance company responsible for not acting in good faith.
Policyholders may be forced to participate in binding arbitration:
As a way to get people to pay lower premiums, insurance companies can make it hard for people to go to court by requiring binding arbitration. Many property owners may choose the cheaper option even though it takes away their constitutional right to a trial by a jury. Also, because of the fees and costs of private arbitration, policyholders will likley not get their money back when an insurance company wrongly underpays or denies a claim.
Backs bailing out insurance companies with money from taxpayers:
During the May special session, lawmakers passed the $2 billion Reinsurance to Assist Policyholders Program (RAP) to help Florida property insurance companies that were having trouble getting enough reinsurance and to help policyholders by lowering their premiums. In an effort to get consumers to pay less in premiums, insurance companies got money by lowering their rates. But while private insurance companies that are in it for the money are getting millions from the RAP program, policyholders are getting little or no discount on their premiums, and in some cases, their policies are being canceled.
People have to tell their elected officials how they feel for democracy to work. Since the Governor has to sign off on this law, here is a link you can use to tell him how you feel: https://www.flgov.com/email-the-governor/